UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xS QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF ~~THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~THE ~~the~~SECURITIES ~~quarterly~~EXCHANGE ~~period~~ACT ~~ended:~~OF ~~January 31, 2011~~1934

oFor ~~TRANSITION~~Quarterly ~~REPORT~~Period ~~PURSUANT~~Ended TOApril ~~SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~30, 2011

~~For the transition period from ___________________________ to ______________________________~~Or

~~Commission~~£ ~~File~~TRANSITION ~~Number: 0-11088~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF

~~TAMIR~~THE ~~BIOTECHNOLOGY,~~SECURITIES ~~INC.~~EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-11088

TAMIR BIOTECHNOLGY, INC.

(Exact name of registrant as specified in its charter)

Delaware		22-2369085
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

22-2369085

(IRS Employer Identification No.)

115825 ~~Deer~~Oberlin ~~Park~~ Drive, ~~Suite~~San ~~204~~Diego, CA ~~Princeton Corporate Plaza, Monmouth Junction, NJ 08852~~92121

(Address of principal executive offices~~) (Zip~~, zip ~~Code~~code)

Registrant's telephone number (including area code): (732) 823-1003

Indicate by check mark whether the registrant (~~Registrant’s~~1) ~~telephone~~has ~~number,~~filed all ~~including~~reports ~~area~~required ~~code~~to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

~~NOT~~YES ~~APPLICABLE~~£ NO S

~~(Former~~Indicate ~~name~~by check mark whether the registrant is a large accelerated filer, ~~former~~an ~~address~~accelerated filer, ~~and~~a ~~former~~non-accelerated ~~fiscal~~filer, ~~year~~or a smaller reporting company. See the definitions of "large accelerated filer," if"accelerated ~~changed~~filer" ~~since~~and ~~last~~"smaller ~~report~~reporting company" in Rule 12b-2 of the Exchange Act.)

~~Indicate~~Large byAccelerated ~~check~~Filer ~~mark~~£ Accelerated ~~whether~~Filer ~~the~~£ ~~registrant~~Non-accelerated ~~has~~Filer ~~(1)~~£ ~~filed~~Smaller ~~all~~reporting ~~reports~~company required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No oS

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~shell company ~~and~~(as ~~posted~~defined onin ~~its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to~~ Rule ~~405~~12b-2 of ~~Regulation S-T during~~ the ~~preceding~~Exchange ~~12 months (or such shorter period that the registrant was required to submit and post such files~~Act). Yes o£ No oS

Indicate ~~by check mark whether~~ the ~~registrant~~number isof ashares ~~large~~outstanding ~~accelerated~~of ~~filer,~~each anof ~~accelerated~~the issuer’s ~~filer,~~classes ~~a non-accelerated filer or a smaller reporting company. See definitions~~ of ~~“large~~common ~~accelerated filer~~stock,” ~~“accelerated~~as ~~filer” and “smaller reporting company”: in Rule 12b-2~~ of the ~~Exchange~~latest ~~Act~~practicable date.

Large Accelerated Filer o Accelerated Filer o Non-accelerated Filer o Smaller Reporting Company x

Class		Outstanding at May 1, 2013
Common Stock, $.001 par value		217,364,331

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of Common Stock, $.001 par value, outstanding as of March 18, 2011 was 47,323,880 shares.

TAMIR BIOTECHNOLOGY, INC.

(AAPRIL ~~Development~~30, ~~Stage Company)~~2011

~~FORM 10-Q~~(UNAUDITED)

INDEX

Part I.	Financial Information
		Page
Item 1.	Financial Statements
PART I	FINANCIAL INFORMATION
	Condensed Balance Sheets		4
ITEM 1.	FINANCIAL STATEMENTS	3
	Condensed Statements of Operations		5
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
	Condensed Statement of Stockholders’ Deficiency		6
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
	Condensed Statements of Cash Flows		7
ITEM 4.	CONTROLS AND PROCEDURES	23
	Notes to Condensed Financial Statements		10
PART II	OTHER INFORMATION	23
Item 2.	Management’s Discussion and Analysis of Financial Conditon
ITEM 1.	LEGAL PROCEEDINGS	23
	and Results of Operations		19
ITEM 1A.	RISK FACTORS	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		24
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES	24
Item 4.	Controls and Procedures		24
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24
Part II.	Other Information
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	24
Item 1.	Legal Proceedings		24
ITEM 5.	OTHER INFORMATION	25
Item 1A.	Risk Factors		24
ITEM 6.	EXHIBITS	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		25
	Signatures	26
Item 3.	Defaults Upon Senior Securities		25
Item 4.	Reserved		25
Item 5.	Other Information		25
Item 6.	Exhibits		25
Signature Page			26

3-2-

PART I. - FINANCIAL INFORMATION

~~Item~~ITEM 1. ~~Financial~~ ~~Statements~~FINANCIAL STATEMENTS

~~TAMIR BIOTECHNOLOGY~~Tamir Biotechnology, ~~INC~~Inc.

(ABalance Sheets ~~Development Stage Company)~~

CONDENSED BALANCE SHEETS

	April 30, 2011		July 31, 2010
	(Unaudited)
ASSETS
Current assets:
Cash and equivalents	$	572,168	$	321,253
Prepaid clinical trial expenses		—		372,216
Prepaid expenses		59,055		105,233
Restricted cash		19		1,228,236
Total current assets		631,242		2,026,938

Property and equipment, net of accumulated depreciation of $375,415 at April 30, 2011 and $378,435 at July 31, 2010		11,836		32,594
Other assets		11,382		—
Deferred financing costs		123,618		182,063

TOTAL ASSETS	$	778,078	$	2,241,595

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

Current liabilities:
Accounts payable	$	523,570	$	507,892
Accrued expenses		610,519		1,006,297
Derivative liability		7,405,982		15,479,366
Current portion of obligations under capital lease		6,309		5,353
Deferred rent		7,741		—
Total current liabilities		8,554,121		16,998,908

Other liabilities:
Accounts payable, net of current portion		444,223		444,223
Obligations under capital lease, net of current portion		2,429		7,288
Accrued retirement benefits		231,250		231,250
Deferred rent		—		12,386
Convertible debt, less discount of $1,611,644 (related party, $491,507) and $2,413,014 (related party, $251,093) at April 30, 2011 and July 31, 2010, respectively		1,638,356		836,986
Accrued interest, convertible debt (related party, $73,726 and $37,664), at April 30, 2011 and July 31, 2010, respectively		245,753		125,548
Deferred revenue		—		5,200,000
Total other liabilities		2,562,011		6,857,681
TOTAL LIABILITIES		11,116,132		23,856,589

Commitments and Contingencies

Stockholders’ deficiency:
Preferred stock, $.001 par value. Authorized and unissued, 1,000,000 shares		—		—
Common stock $.001 par value. Authorized 250,000,000 shares , issued and outstanding 49,823,880 and 47,313,880 shares at April 30, 2011, and July 31, 2010, respectively		49,824		47,314
Additional paid-in capital		100,806,082		101,456,909
Accumulated deficit		(111,193,960)		(123,119,217)
Total stockholders’ deficiency		(10,338,054)		(21,614,994)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	778,078	$	2,241,595

~~January~~The ~~31,~~accompanying ~~2011~~notes ~~and~~are ~~July~~an ~~31,~~integral part ~~2010~~of these financial statements.

	January 31, 2011 (Unaudited)			July 31, 2010 (See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	710,329		$	321,253
Prepaid clinical trial expenses		–			372,216
Prepaid expenses		95,873			105,233
Restricted cash		274,356			1,228,236
Total current assets		1,080,558			2,026,938
Property and equipment, net of accumulated depreciation and amortization of $371,195 in 2011 and $378,435 in 2010		16,056			32,594
Deferred financing costs		143,656			182,063
Total assets	$	1,240,270		$	2,241,595
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Accounts payable	$	631,756		$	507,892
Accrued clinical trial expenses		221,150			295,150
Accrued professional service fees		332,710			374,361
Accrued compensation expense		53,860			136,634
Derivative liability		11,038,205			15,479,366
Current portion of obligations under capital lease		5,973			5,353
Other accrued expenses		-			200,152
Total current liabilities		12,283,654			16,998,908
Other liabilities:
Accounts payable, net of current portion		444,223			444,223
Obligations under capital lease, net of current portion		4,138			7,288
Accrued retirement benefits		231,250			231,250
Deferred rent		9,289			12,386
Convertible debt, less discount of $1,872,831 at January 31, 2011 (related party $413,151) and $2,413,014 at July 31, 2010 (related party, $251,093)		1,377,169			836,986
Accrued interest, convertible debt (related party, $61,973 at January 31, 2011 and $37,664 at July 31, 2010)		206,575			125,548
Deferred revenue		5,200,000			5,200,000
Total other liabilities		7,472,644			6,857,681
Total liabilities		19,756,298			23,856,589
Commitments and Contingencies
Stockholders’ deficiency:
Preferred stock, $.001 par value. Authorized and unissued, 1,000,000 shares at January 31, 2011 and July 31, 2010		–			–
Common stock $.001 par value. Authorized 250,000,000 shares at January 31, 2011 and July 31, 2010; issued and outstanding 47,323,880 at January 31, 2011 and 47,313,880 shares at July 31, 2010		47,324			47,314
Common stock to be issued		500,000			–
Capital in excess of par value		101,616,454			101,456,909
Deficit accumulated during development stage		(120,679,806	)		(123,119,217	)
Total stockholders’ deficiency		(18,516,028	)		(21,614,994	)
Total liabilities and stockholders’ deficiency	$	1,240,270		$	2,241,595

-3-

~~See~~Tamir Biotechnology, ~~accompanying notes to condensed financial statements~~Inc.

4Statements of Operations

~~CONDENSED STATEMENTS OF OPERATIONS~~(Unaudited)

Three and six months ended January 31, 2011 and 2010,

	Three Months Ended April 30,						Nine Months Ended April 30,
	2011			2010			2011			2010

Revenues	$	5,200,000		$	—		$	5,200,000		$	18,750

Operating expenses:
Research and development		132,145			133,658			776,446			416,313
General and administrative		(1,107,137	)		411,069			(413,999	)		1,238,756

Total operating expenses		(974,992	)		544,727			362,447			1,655,069

Income (Loss) from operations		6,174,992			(544,727	)		4,837,553			(1,636,319	)

Other Income (expense)
Investment income		20			225			248			893
Amortization of debt discount		(261,187	)		(261,187	)		(801,370	)		(566,895	)
Change in fair value of derivative liability		3,632,223			(6,700,635	)		8,073,384			(12,190,313	)
Interest Expense - related parties		(11,753	)		(15,356	)		(36,062	)		(32,807	)
Interest expense - other		(48,448	)		(36,774	)		(148,496	)		(80,869	)
Total other income (expense)		3,310,855			(7,013,727	)		7,087,704			(12,869,991	)
Income (Loss) before income tax expense (benefit)		9,485,847			(7,558,454	)		11,925,257			(14,506,310	)

Income tax expense (benefit)		—			(646,649	)		—			(646,649	)

Net Income (Loss)	$	9,485,847		$	(6,911,805	)	$	11,925,257		$	(13,859,661	)

Income (Loss) per Common Shares
Basic	$	0.20		$	(0.15	)	$	0.25		$	(0.29	)
Diluted	$	0.07		$	(0.15	)	$	0.04		$	(0.29	)
Weighted Average Number of Shares Outstanding
Basic		47,969,947			47,313,880			47,969,947			47,313,880
Diluted		92,140,264			47,313,880			113,896,338			47,313,880

~~and~~The ~~the~~accompanying ~~Period~~notes ~~from~~are ~~August~~an ~~24,~~integral part ~~1981~~of these financial statements.

~~(Date of Inception) to January 31, 2011~~-4-

~~(Unaudited)~~Tamir Biotechnology, Inc.

	Three Months Ended January 31,						Six Months Ended January 31,						August 24, 1981 (Date of Inception) to
	2011			2010			2011			2010			January 31, 2011
Sales	$	-		$	-		$	-		$	18,750		$	572,239
Operating expenses:
Cost of sales		-			-			-			-			336,495
Research and development		424,975			121,774			644,301			282,655			73,744,052
General and administrative		283,368			428,214			693,138			827,687			43,360,524
Total operating expenses		708,343			549,988			1,337,439			1,110,342			117,441,071
Loss from operations		(708,343	)		(549,988	)		(1,337,439	)		(1,091,592	)		(116,868,832	)
Investment income		82			417			229			668			2,303,442
Other income		-			-			-			-			99,939
Interest:
Related parties, net		(18,369	)		(10,725	)		(36,738	)		(17,451	)		(1,235,359	)
Debt discount and fair value adjustment – derivative security		12,029,172			3,643,697			3,815,254			(5,795,386	)		(8,640,013	)
Others		(935	)		(42,332	)		(1,895	)		(44,095	)		(3,010,888	)
Income (loss) before state tax benefit		11,301,607			3,041,069			2,439,411			(6,947,856	)		(127,351,711	)
State tax benefit		-			-			-			-			6,671,905
Net income (loss)	$	11,301,607		$	3,041,069		$	2,439,411		$	(6,947,856	)	$	(120,679,806	)
Income (loss) per common share - basic	$	0.24		$	0.06		$	0.05		$	(0.15	)
Loss per common share - diluted	$	( 0.01	)	$	( 0.01	)	$	(0.02	)	$	(0.15	)
Weighted average number of shares outstanding - basic		47,323,880			47,313,880			47,320,728			47,313,880
Weighted average number of shares outstanding - diluted		82,185,891			90,647,208			82,472,401			47,313,880
See accompanying notes to condensed financial statements.

Statements of Cash Flows

5(Unaudited)

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY

	Nine Months Ended
	April 30, 2011			April 30, 2010
Cash Flows from Operating Activities:
Net Income (Loss)	$	11,925,257		$	(13,859,661	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		20,758			74,494
Share-based compensation		(1,150,917	)		248,254
(Decrease) in deferred rent		(4,645	)		(270,200	)
Amortization of debt discount		801,370			566,895
Change in fair value of derivative liability		(8,073,384	)		(12,190,313	)
Amortization of deferred financing costs		61,472			24,327
Changes in assets and liabilities:
(Increase) Decrease in prepaid expenses		407,012			(59,076	)
(Increase) Decrease in restricted cash		1,228,217			(1,334,013	)
Increase (Decrease) in accounts payable		15,678			(75,203	)
Decrease in accrued retirement benefits		—			(143,442	)
Increase (Decrease) in accrued expenses		(275,573	)		83,080
Decrease in deferred revenue		(5,200,000	)		—
Net Cash Used in Operating Activities		(244,755	)		(2,554,232	)

Cash Flows from Investing Activities:
Capital expenditures		—			(2,748	)
Net Cash Used in Investing Activities		—			(2,748	)

Cash Flows from Financing Activities:
Decrease in deferred financing costs		(3,027	)		(147,710	)
Payment of capital lease obligation		(3,903	)		(3,135	)
Proceeds from issuance of common stock, net		500,000			—
Proceeds from exercise of stock options and warrants, net		2,600			—
Proceeds from issuance of convertible debentures, related party		—			1,000,000
Proceeds from issuance of convertible debentures, unrelated party		—			2,250,000
Net Cash Provided by Financing Activities		495,670			3,099,155

Net increase in cash and equivalents		250,915			542,175
Cash and equivalents at beginning of period		321,253			129,194
Cash and equivalents at end of period	$	572,168		$	671,369

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	2,881		$	4,316
Cash paid for taxes	$	—		$	—

Non-cash Transactions
Derivative liability – warrant reclassification	$	—		$	611,085

~~Period~~The ~~from~~accompanying ~~July~~notes ~~31,~~are ~~2010~~an tointegral part ~~January~~of ~~31,~~these ~~2011~~financial statements.

~~(Unaudited)~~-5-

	Common Stock
	Number of Shares		Amount		Common Stock To Be Issued		Capital In Excess of Par Value		Deficit Accumulated During Development Stage			Total Stockholders’ Deficiency
Balance at July 31, 2010		47,313,880	$	47,314	$	—	$	101,456,909	$	(123,119,217	)	$	(21,614,994	)
Common stock to be issued						500,000							500,000
Stock option exercise		10,000		10		—		2,590		—			2,600
Stock-based compensation		—		—		—		156,955		—			156,955
Net income		—		—		—		—		2,439,411			2,439,411
Balance at January 31, 2011		47,323,880	$	47,324	$	500,000	$	101,616,454	$	(120,679,806	)	$	(18,516,028	)
See accompanying notes to condensed financial statements.

TAMIR BIOTECHNOLOGY, INC.

6NOTES TO FINANCIAL STATEMENTS

~~CONDENSED~~APRIL ~~STATEMENTS~~30, OF2011 ~~CASH~~(UNAUDITED) ~~FLOWS~~AND JULY 31, 2010

~~Six~~NOTE ~~months~~1 ~~ended~~- ~~January~~Business ~~31, 2011 and 2010,~~Description

~~and~~Tamir ~~the~~Biotechnology, ~~Period~~Inc. ~~from~~(formerly known as Alfacell Corporation) (“Tamir”, “Company”, “we”, “us”, “our”, “our company”) is a Delaware corporation incorporated on August 24, 1981. We are a biopharmaceutical company primarily engaged in the discovery, development, and licensing of a new class of antiviral therapeutic drugs for the treatment of pathological conditions. Our proprietary drug discovery and development program consists of novel therapeutics which are being developed from amphibian ribonucleases (RNases). Since 2011, Tamir’s focus has been its antiviral therapeutic drug development strategy and plan.

~~(Date~~The Company is engaged in the research, development, licensing and commercialization of ~~Inception)~~drugs tofor ~~January~~the 31treatment of various life threatening diseases. As of April 30, 2011, the Company is pursuing various available strategic alternatives to raise additional funds. The Company plans to continue the further development and licensing of its drug product candidates, which requires capital for research, product development, and market development activities. Future product development will require clinical testing, regulatory approval, and substantial additional investment prior to commercialization. The future success of the Company is dependent on its ability to make progress in the development of its drug product candidates and, ultimately, to attain future profitable operations through manufacturing and marketing of those drug product candidates. There can be no assurance that the Company will be able to obtain the necessary financing or regulatory approvals to be able to successfully develop, manufacture, and market its products, or attain successful future operations. Accordingly, the Company’s future success is uncertain.

~~(Unaudited)~~The Company is no longer a development stage enterprise as it has started generating revenue from licensing, resulting from its past and ongoing research and development activities. Management expects to generate such revenue, as well as revenue from product sales, on an ongoing basis.

	Six Months Ended January 31,						August 24, 1981 (Date of Inception) to
	2011			2010			January 31, 2011
Cash flows used in operating activities:
Net income (loss)	$	2,439,411		$	(6,947,856	)	$	(120,679,806	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Gain on sale of marketable equity securities		-			-			(25,963	)
Depreciation and amortization		16,538			70,372			1,840,304
Loss on disposal of property and equipment		-			-			18,926
Loss on lease termination		-			-			30,964
Share-based compensation		156,955			163,347			14,354,309
Decrease in deferred rent		(3,097	)		(268,652	)		(88,675	)
Amortization of debt discount		540,183			305,708			1,971,388
Fair value of derivative liability		( 4,441,161	)		5,489,678			7,177,120
Amortization of deferred financing cost		41,434			-			86,139
Amortization of deferred compensation		-			-			11,442,000
Changes in assets and liabilities:
Decrease (increase) in prepaid expenses		381,576			(83,528	)		(155,740	)
Decrease in loan receivable, related party		-			-			96,051
Decrease (increase) in restricted cash		953,880			(1,414,939	)		(274,356	)
Increase in loans and interest payable, related party		24,308			17,451			819,922
Increase in accounts payable		123,864			112,066			1,582,614
Increase in accrued payroll and expenses, related parties		-			-			2,348,145
(Decrease) increase in accrued retirement benefits		(84,250	)		(104,442	)		244,750
Increase (decrease) in accrued expenses		(257,608	)		86,454			1,444,295
Increase in deferred revenue		-			-			5,200,000
Net cash used in operating activities		(107,967	)		(2,574,341	)		(72,567,613	)
Cash flows used in investing activities:
Purchase of marketable equity securities		-			-			(290,420	)
Purchase of short-term investments		-			-			(1,993,644	)
Proceeds from sale of marketable equity securities		-			-			316,383
Proceeds from sale of short-term investments		-			-			1,993,644
Capital expenditures		-			(2,250	)		(1,607,814	)
Patent costs		-			-			(97,841	)
Net cash used in investing activities		-			(2,250	)		(1,679,692	)

In addition, uncertainty exists as to the Company’s ability to protect its rights to patents and its proprietary information. There can also be no assurance that research and discoveries by others will not render some or all of the Company’s technology or drug product candidates noncompetitive or obsolete, nor can there be any assurance that unforeseen problems will not develop with the Company’s technologies or applications, or that the Company will be able to address successful technological challenges it encounters in its research and development programs. While the Company maintains insurance to cover the use of its drug product candidates in clinical trials, it does not maintain insurance covering the sale of its products nor is there any assurance that it will be able to obtain or maintain such insurance on acceptable terms or with adequate coverage against potential liabilities.

~~(continued)~~NOTE 2 - Summary of Significant Accounting Policies

~~See~~Going ~~accompanying notes to condensed financial statements.~~concern

The accompanying financial statements were prepared assuming we will continue as a going concern. The Company had net income of $11,925,257 and net loss of $13,859,661 for the nine months ended April 30, 2011 and 2010, respectively. As of April 30, 2011, the Company had a negative working capital of $7,922,879 and an accumulated deficit of $111,193,960. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue its existence. The recovery of the Company’s assets is dependent upon continued operations of the Company and future events, the outcome of which is unknowable. The Company intends to continue to attempt to raise additional capital, but there can be no certainty that such efforts will be successful.

~~CONDENSED STATEMENTS OF CASH FLOWS, Continued~~-6-

~~Six~~Use ~~months~~of ~~ended January 31, 2011 and 2010,~~Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the ~~Period~~reported ~~from~~amounts ~~August~~of ~~24,~~assets ~~1981~~and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

~~(Date of Inception) to January 31, 2011~~Reclassifications

~~(Unaudited)~~Certain prior period amounts were reclassified to conform to the presentation in the current period. The reclassifications did not have an effect on the results of operations or the cash flow.

	Six Months Ended January 31,						August 24, 1981 (Date of Inception) to
	2011			2010			January 31, 2011
Cash flows from financing activities:
Proceeds from short-term borrowings	$	-		$	-		$	874,500
Payment of short-term borrowings		-			-			(653,500	)
Increase in loans payable - related party, net		-			-			2,628,868
Proceeds from bank debt and other long-term debt, net of costs		-			-			3,667,460
Reduction of bank debt and long-term debt		-			-			(2,966,568	)
Increase in deferred financing cost		(3,027	)		(117,201	)		(229,795	)
Payment of capital lease obligation		(2,530	)		(2,032	)		(13,667	)
Proceeds from issuance of common stock, net		-			-			53,102,893
Proceeds from common stock to be issued		500,000			-			500,000
Proceeds from exercise of stock options and warrants, net		2,600			-			14,083,450
Proceeds from issuance of convertible debentures, related party		-			3,250,000			3,547,000
Proceeds from issuance of convertible debentures, unrelated party		-			-			416,993
Net cash provided by financing activities		497,043			3,130,767			74,957,634
Net increase in cash and cash equivalents		389,076			554,176			710,329
Cash and cash equivalents at beginning of period		321,253			129,194			-
Cash and cash equivalents at end of period	$	710,329		$	683,370		$	710,329
Supplemental disclosure of cash flow information – interest paid	$	1,895		$	3,374		$	1,731,764
Noncash financing activities:
Issuance of convertible subordinated debenture for loan payable to officer	$	-		$	-		$	2,725,000
Issuance of common stock upon the conversion of convertible subordinated debentures, related party	$	-		$	-		$	3,242,000
Conversion of short-term borrowings to common stock	$	-		$	-		$	226,000
Conversion of accrued interest, payroll and expenses by related parties to stock options	$	-		$	-		$	3,194,969
Repurchase of stock options from related party	$	-		$	-		$	(198,417	)
Conversion of accrued interest to stock options	$	-		$	-		$	142,441
Conversion of accounts payable to common stock	$	-		$	-		$	506,725

Cash and Equivalents

~~(continued)~~The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The carrying value of these investments approximates their fair value due to their short maturity and liquidity. The Company maintains cash deposits with banks that at times exceed applicable insurance limits.

~~See~~Property ~~accompanying~~and ~~notes to condensed financial statements.~~Equipment

8Property and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs that do not extend the life of assets are expensed when incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in operations for the period in which the transaction takes place.

~~CONDENSED~~Long-lived ~~STATEMENTS~~assets OFare ~~CASH~~reviewed for ~~FLOWS~~impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount exceeds its estimated future cash flows, ~~Concluded~~an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset.

~~Six~~Derivative ~~months~~Instrument ~~ended January 31, 2011 and 2010,~~Liability

The Company accounts for derivative instruments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the ~~Period~~balance ~~from~~sheet ~~August~~at 24fair value, ~~1981~~regardless of the hedging relationship designation. Accounting for changes in the fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged.

~~(Date~~Accounting ofFor ~~Inception)~~Warrants toIssued With ~~January~~Convertible ~~31, 2011~~Debt

~~(Unaudited)~~The Company accounts for the intrinsic value of beneficial conversion rights arising from the issuance of convertible debt instruments with non-detachable conversion rights that are in-the-money at the commitment date pursuant to the consensuses of ASC 470-20, “Debt: Debt With Conversion and Other Options”. Such value is allocated to additional paid–in capital and the resulting debt discount is charged to interest expense over the terms of the notes payable. Such value is determined after first allocating a portion of the proceeds received to warrants or any other detachable instruments included in the exchange.

	Six Months Ended January 31,				August 24, 1981 (Date of Inception) to
	2011		2010		January 31, 2011
Conversion of notes payable, bank and accrued interest to long-term debt	$	-	$	-	$	1,699,072
Conversion of loans and interest payable, related party and accrued payroll and expenses, related parties to long-term accrued payroll and other, related party	$	-	$	-	$	1,863,514
Issuance of common stock upon the conversion of convertible subordinated debentures, other	$	-	$	-	$	1,584,364
Issuance of common stock for services rendered	$	-	$	-	$	2,460
Lease incentive allowance	$	-	$	-	$	67,000
Derivative liability – warrant reclassification	$	-	$	747,235	$	611,085
Issuance of warrants with notes payable	$	-	$	-	$	594,219
Acquisition of equipment through capital lease obligation	$	-	$	-	$	23,778
See accompanying notes to condensed financial statements.

-7-

9Fair Value Measurements

~~TAMIR~~The ~~BIOTECHNOLOGY~~Company adopted ASC Topic 820, ~~INC~~“Fair Value Measurement”, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (Aobservable ~~Development~~inputs that ~~Stage~~are ~~Company~~classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

~~NOTES~~· TOLevel ~~CONDENSED~~1 ~~FINANCIAL~~inputs ~~STATEMENTS~~utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

· Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (~~Unaudited~~other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

~~1. ORGANIZATION~~· ~~AND~~Level ~~BASIS~~3 OFinputs ~~PRESENTATION~~are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In ~~the~~instances ~~opinion~~where ~~of management,~~ the ~~accompanying unaudited condensed financial statements~~ determination of ~~Tamir Biotechnology, Inc. (formerly Alfacell Corporation) (“Tamir” or~~ the ~~“Company”)~~fair ~~have~~value ~~been~~measurement ~~prepared~~is inbased ~~accordance~~on ~~with~~inputs ~~U.S.~~from ~~generally~~different ~~accepted~~levels ~~accounting~~of ~~principles (“GAAP”) for interim financial information and with~~ the ~~instructions~~fair tovalue ~~Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly~~hierarchy, ~~they~~the dolevel ~~not~~in ~~contain all of~~ the ~~information~~fair ~~and~~value hierarchy ~~notes~~within ~~required~~which bythe ~~U.S.~~entire ~~GAAP~~fair ~~for~~value ~~complete~~measurement ~~financial~~falls ~~statements. In~~is ~~the~~based ~~opinion~~on ~~of management,~~ the ~~accompanying~~lowest ~~unaudited~~level ~~condensed~~input ~~interim~~that ~~financial~~is ~~statements~~significant ~~contain~~to ~~all~~the ~~adjustments~~fair value ~~(consisting~~measurement ofin ~~normal~~its ~~recurring~~entirety. ~~adjustments)~~The ~~necessary to present fairly the~~ Company’s ~~financial~~assessment ~~position as~~ of ~~January 31, 2011,~~ the ~~results~~significance of ~~its operations~~a ~~for~~particular ~~the~~input ~~three and six months ended January 31, 2011 and 2010, and the period from August 24, 1981 (date of inception)~~ to ~~January 31, 2011,~~ the ~~changes~~fair value measurement in ~~stockholders’ deficiency for the six months ended January 31, 2011, and~~ its ~~cash~~entirety ~~flows~~requires ~~for the six month periods ended January 31~~judgment, ~~2011~~ and ~~2010,~~considers ~~and~~factors ~~the~~specific ~~period from August 24, 1981 (date of inception)~~ to ~~January 31, 2011. The results of operations for~~ the ~~three~~asset ~~and six months ended January 31, 2011 are not necessarily indicative of operating results for fiscal year 2011~~ or ~~future interim periods~~liability. The July 31, 2010 balance sheet presented herein has been derived from the audited financial statements included in the Company’s annual report on Form 10-K for the fiscal year ended July 31, 2010 (the “Annual Report”), filed with the Securities and Exchange Commission.

~~Certain~~Income footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission. The unaudited condensed financial statements in this report should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report.Taxes

~~Financial~~Income ~~instruments~~taxes ~~consist~~are ~~primarily~~accounted offor under ~~cash~~the asset and ~~cash~~liability ~~equivalents,~~method. ~~accounts~~Deferred ~~payable~~tax assets and ~~convertible~~liabilities ~~debt. The~~are recognized for future tax consequences attributable to differences between the financial statement carrying ~~value~~amounts of ~~these~~existing ~~financial~~assets ~~instruments~~and ~~approximates~~liabilities ~~fair~~and ~~value~~their ~~due~~respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the ~~relative~~years ~~short~~in ~~term~~which ~~nature~~those oftemporary ~~these~~differences ~~investments~~are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the ~~carrying~~period ~~value~~that ofincludes the ~~convertible~~enactment date. ~~debt~~Management ~~approximates~~provides ~~their~~valuation ~~fair~~allowances ~~value~~against ~~due~~the todeferred ~~recent~~tax ~~issuance~~assets offor ~~convertible~~amounts ~~debt~~which are not considered “more likely than not” to be realized.

~~The~~Revenue Company is a development stage company as defined in the Accounting Standards Codification (“ASC”) “Development Stage Entities.” The Company is devoting substantially all of its present efforts to establishing its business. Its planned principal operations have not commenced and, accordingly, no significant revenue has been derived therefrom.Recognition

InThe ~~February~~Company ~~2011,~~recognizes ~~based upon the previously reported positive results of the~~ revenue in ~~vivo~~accordance ~~studies~~with ~~performed at~~ the ~~National~~Securities ~~Institute of Allergy~~ and ~~Infectious~~Exchange ~~Diseases~~Commission ~~for Yellow fever, Dengue fever, cytomegalovirus~~ (~~CMV~~“SEC”), ~~SARS~~Staff ~~and~~Accounting ~~human~~Bulletin ~~papillomavirus~~ (~~HPV~~“SAB”) No. 104, ~~the~~“Revenue ~~Company~~Recognition” ~~decided~~issued toby ~~focus~~the ~~its~~staff ~~resources~~of tothe ~~further these studies~~SEC. ~~Therefore,~~ ~~the~~Under ~~Company~~SAB ~~placed~~No. on104, ~~hold~~revenue ~~the~~is ~~Phase~~recognized IIwhen ~~trial~~persuasive evidence of ~~ranpirnase~~an ~~(ONCONASE®)~~arrangement inexists, ~~patients~~delivery ~~suffering~~has ~~from~~occurred ~~non-small~~and/or ~~cell~~services ~~lung~~have ~~cancer. The~~been ~~Company~~rendered, ~~continues~~the tosales ~~seek~~price ~~financing~~is ~~required~~fixed toor ~~continue~~determinable, and ~~pursuing~~collectability ~~the~~is ~~development~~reasonably ~~of ranpirnase~~assured.

10-8-

The Company isenters ~~continuing~~into tomarketing and ~~develop~~distribution ~~its~~agreements, ~~drug~~which ~~product~~contain ~~candidates,~~multiple ~~which~~deliverables. ~~require~~Under ~~substantial~~the ~~capital~~provisions ~~for~~of ~~research,~~ASC ~~product~~Topic ~~development~~605, ~~and~~“Revenue ~~market~~Recognition - ~~development~~Multiple ~~activities. The~~Deliverable Revenue Arrangements”, the Company ~~has~~evaluates ~~not~~whether ~~yet~~these ~~initiated~~deliverables ~~marketing~~constitute separate units of aaccounting ~~commercial~~to ~~drug~~which ~~product~~total arrangement consideration is allocated. ~~Future~~A ~~product~~deliverable ~~development~~qualifies ~~will~~as ~~require~~a ~~clinical~~separate ~~testing,~~unit ~~regulatory~~of ~~approval~~accounting when the item delivered to the customer has standalone value, ~~and~~there ~~substantial~~is ~~additional~~objective ~~investment~~and ~~prior~~reliable toevidence ~~commercialization. The~~of ~~future~~fair ~~success~~value of items that have not been delivered to the ~~Company~~customer, and, if there is ~~dependent~~a ongeneral ~~its~~right ~~ability~~of toreturn ~~make~~for ~~progress~~the initems delivered to the ~~development~~customer, delivery or performance of ~~its~~the ~~drug~~undelivered ~~product~~items ~~candidates~~is considered probable and, ~~ultimately,~~substantially ~~upon~~in ~~its~~the ~~ability~~control of the Company. Arrangement consideration is allocated to ~~attain~~units ~~future~~of ~~profitable~~accounting ~~operations~~on ~~through~~a relative fair-value basis or the ~~successful~~residual ~~manufacturing~~method ~~and~~if ~~marketing~~the Company is unable to determine the fair value of ~~those~~all ~~drug~~deliverables ~~product~~in ~~candidates~~the arrangement. ~~There~~ ~~can~~Consideration beallocated noto ~~assurance~~a unit of accounting is limited to the amount that is not contingent upon future performance by the Company. ~~will~~Upon bedetermination ~~able~~of toseparate ~~obtain~~units of accounting and allocated consideration, the ~~necessary~~general ~~financing~~criteria orfor ~~regulatory~~revenue ~~approvals~~recognition are applied to beeach ~~able~~unit toof ~~successfully~~accounting. ~~develop,~~Up-front ~~manufacture,~~nonrefundable ~~and~~fee received ~~market~~by ~~its~~the ~~products,~~Company orfor ~~attain~~substantive ~~successful~~milestones ~~future~~are ~~operations. Accordingly,~~recognized upon achievement of the ~~Company’s~~milestones. ~~future~~Any ~~success~~amounts isreceive ~~uncertain~~prior to satisfying our revenue recognition criteria are recorded as deferred in the accompanying balance sheets.

2In July 2007, the Company entered into an agreement with USP to market, sell and distribute ONCONASE® in Poland and other countries in Eastern Europe. ~~LIQUIDITY~~ The Company received a $0.1 million upfront nonrefundable fee in July 2007 and is entitled to receive future additional fees, milestone payments and royalties. USP is responsible for all commercial costs in the territory. The Company agreed to provide or arrange for contract manufacture of a commercial supply of ONCONASE® upon receipt of marketing approval in the territory. The up-front nonrefundable fee received by the Company was to be recognized ratably as revenue once the general criteria for revenue recognition has been met for the unit of accounting to which the fee has been allocated.

~~The~~In ~~Company~~January ~~has reported net income of approximately $11~~2008,~~302,000~~ ~~and~~the ~~$2,439,000~~Company entered ~~for~~into ~~the~~a ~~three~~marketing and ~~six~~distribution ~~months~~agreement ~~ended~~with ~~January~~BL&H ~~31,~~Co. ~~2011,~~Ltd. ~~respectively~~(“BL&H”) ~~due~~for ~~primarily to~~ the ~~change~~commercialization of ONCONASE® in ~~fair~~Korea, ~~value~~Taiwan ofand ~~derivative~~Hong ~~liability~~Kong. atUnder ~~January~~the 31agreement, ~~2011~~the ~~and~~Company ~~net~~received ~~losses~~a of$0.1 ~~approximately~~million ~~$14,187,000~~up-front fee and ~~$4,539,000~~is ~~for~~eligible ~~the~~to ~~fiscal~~receive ~~years~~additional ~~ended~~cash ~~July~~milestones ~~31, 2010~~ and ~~2009,~~50% ~~respectively. As~~ of ~~January~~net ~~31,~~sales ~~2011,~~in the ~~Company~~territory. ~~had~~The aCompany ~~working~~will ~~capital~~be ~~deficit~~responsible offor the ~~approximately~~manufacture ~~$11,203,000~~ and ~~cash~~supply ~~and~~of ~~cash~~ONCONASE® ~~equivalents~~to ofBL&H, ~~approximately~~while ~~$710,000. The~~BL&H ~~loss~~will ~~from~~be ~~date~~responsible offor ~~inception,~~all ~~August~~activities ~~24,~~and ~~1981,~~costs related to ~~January~~regulatory ~~31,~~filings ~~2011~~and ~~amounts~~commercial toactivities ~~approximately~~in ~~$120,680,000~~the territory.

~~The~~In ~~Company~~January ~~expects that its cash balances~~2008, ~~including~~the ~~approximately~~Company entered ~~$274,000~~into ina ~~restricted~~U.S. ~~cash~~License ~~intended~~Agreement ~~to be used~~ for ~~future~~ONCONASE® ~~clinical~~with ~~trials~~Par ~~as of January 31~~Pharmaceutical, ~~2011,~~Inc. ~~will~~(“Par”). beUnder ~~sufficient~~the terms ~~to support its activities into its first fiscal quarter ending October 2011, based on its reduced level~~ of ~~operations. The~~the ~~Company’s~~License ~~long-term continued operations will depend on its ability to raise additional funds through various potential sources such as equity and debt financing~~Agreement, ~~convertible debentures~~Strativa, ~~collaborative~~the ~~agreements,~~proprietary ~~strategic~~products ~~alliances,~~division ~~sale~~ of ~~tax benefits~~Par, ~~revenues~~received ~~from~~exclusive ~~the~~marketing, ~~commercial~~sales ~~sale~~ and ~~named-patient~~distribution rights ~~basis~~to ~~sale of~~ ONCONASE®, ~~licensing~~for ofthe ~~its~~treatment ~~proprietary~~of ~~RNase~~cancer ~~technology~~in ~~and~~the ~~its~~U.S. ~~ability to realize revenues from its technology~~ and its ~~drug candidates via out-licensing agreements with other companies~~territories. The Company ~~may~~retained ~~pursue~~all ~~available~~rights and ~~strategic~~obligations ~~alternatives~~for ~~which~~product ~~focus on~~manufacturing, ~~but~~clinical ~~are~~development ~~not limited to, strategic partnership transactions. Such additional funds~~ and ~~various~~obtaining ~~alternatives~~regulatory ~~may~~approvals, ~~not~~as ~~become~~well ~~available~~ as ~~the~~all ~~Company~~rights ~~may~~for ~~need them or be available on terms acceptable to the Company, if at all~~those non-U. ~~Insufficient~~S. ~~funds~~jurisdictions ~~could~~in ~~require~~which the Company tohas ~~delay,~~not ~~scale~~currently ~~back,~~granted orany ~~eliminate~~such ~~one~~rights or ~~more~~obligations ~~of its research and development programs or~~ to ~~out-license to~~ third parties. ~~drug~~The ~~product candidates or technologies that the~~ Company received ~~would~~a ~~otherwise~~nonrefundable ~~seek~~cash topayment ~~develop~~of ~~and~~$5 ~~commercialize~~million ~~without~~upon ~~relinquishing~~the ~~its~~signing ~~rights~~of ~~thereto. Unless and until~~ the ~~Company’s~~License ~~operations~~Agreement ~~generate significant revenues~~ and ~~cash~~would ~~flow,~~have ~~the~~been ~~Company~~entitled ~~will attempt~~ to ~~continue~~additional development toand ~~fund~~sales ~~operations~~milestone ~~from~~payments ~~cash on hand~~ and ~~through~~double-digit ~~the~~royalties ~~sources of capital described above. There can be no assurance that the Company will be able to raise the capital it needs~~ on ~~terms~~net ~~which~~sales ~~are~~of ~~acceptable, if at all~~ONCONASE®.

~~The~~On ~~report~~September of8, 2009, the Company’s and ~~independent~~Par ~~registered~~entered ~~public~~into ~~accounting~~a ~~firm~~Termination onand Mutual Release Agreement (the “Termination Agreement”) pursuant to which the Company’s ~~fiscal~~License ~~year~~Agreement ~~ended~~and ~~July~~Supply ~~31,~~Agreement ~~2010~~with ~~financial~~Par ~~statements~~were ~~expressed~~terminated. ~~that~~The ~~there~~License Agreement was ~~substantial~~terminated ~~doubt~~and ~~about~~all rights under the ~~Company’s~~license ~~ability~~granted to ~~continue~~Par asrevert aback ~~going~~to ~~concern~~the Company under the Termination Agreement. ~~Continued~~ ~~operations~~Under ~~are~~the ~~dependent~~Supply onAgreement, the Company had agreed to supply all of Par’s ~~ability~~requirements tofor ~~raise~~ONCONASE®. ~~additional~~Pursuant ~~capital~~to ~~from~~the ~~various~~Termination ~~sources~~Agreement, ~~such~~Par aswill be ~~those~~entitled ~~described~~to ~~above. Such~~a ~~capital~~royalty ~~raising~~of ~~opportunities~~2% ~~may~~of ~~not~~net besales ~~available~~of ONCONASE® or ~~may~~any ~~not~~other beranpirnase ~~available~~product ondeveloped ~~reasonable~~by ~~terms. The~~the Company’s for ~~financial~~use ~~statements~~in dothe ~~not~~treatment ~~include~~of ~~any~~cancer ~~adjustments~~in ~~that~~the ~~may~~U.S. ~~result~~and ~~from~~its territories commencing with the ~~outcome~~first sale of ~~this~~such ~~uncertainty~~product and terminating upon the later to occur of the 12th anniversary of the first sale and the date of expiration of the last valid claim of a pending application or issued patent owned or controlled by the Company with respect to such product.

3The Company evaluated both the License Agreement and the Termination Agreement and determined that the Company is obligated to provide royalty payments in the event the Company has net sales in the field of cancer. ~~INCOME~~ ~~(LOSS)~~In ~~PER~~February ~~COMMON~~2011, ~~SHARE~~we decided to suspend the Phase II trial of ONCONASE® in combination with carboplatinum regimens in patients suffering from non-small cell lung cancer who have reached maximum progression after receiving two cycles of Alimta plus Carboplatin. Given our limited resources and based upon previously reported positive in vitro antiviral results, we shifted our focus to the completion of in vivo studies for CMV, and HPV. At this point we terminated further development of our compounds in the cancer field. Therefore, as of February 2011, there was nothing left to do to earn the non-refundable deposit and the Company took the $5 million as income.

The Company presents “basic” income (loss) per common share and, if applicable, “diluted” income per common share pursuant to the provisions of ASC “Earnings per Share”. Basic income (loss) per common share is calculated by dividing net income or loss by the weighted average number of common shares outstanding during each period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of outstanding stock options and warrants and the conversion of outstanding convertible debentures were issued during the period and the treasury stock method had been applied to the proceeds from the exercise of the options and warrants and net income or loss was adjusted for interest on the convertible debentures.-9-

11Research and Development

AsResearch ~~of January 31, 2011, there were potentially dilutive securities of stock options, warrants~~ and ~~convertible~~development ~~notes~~costs are ~~and~~expensed ~~accrued~~as ~~interest~~incurred. ~~outstanding~~These ~~(see~~costs ~~Notes 4 and 6 herein). However~~include, ~~diluted~~among ~~per~~other ~~share amount presented in the accompanying condensed statements of operations for the six months ended January 31~~things, ~~2010~~consulting isfees ~~the same as basic per common share amount because the Company has incurred a net loss for this period~~ and ~~the~~costs ~~basic~~related ~~and~~to ~~diluted per common share amount is~~ the ~~same,~~conduct ~~since the inclusion~~ of ~~all~~human ~~potentially dilutive securities would be anti-dilutive~~clinical trials. ~~For~~ ~~the~~The ~~three~~Company ~~months~~also ~~ended~~allocates ~~January~~indirect 31costs, ~~2011~~consisting ~~and~~primarily ~~2010 and the six months ended January 31, 2011, the accompanying condensed statements~~ of ~~operations~~operational ~~presented~~costs anfor ~~income~~administering ~~per~~research ~~basic common share~~ and adevelopment activities ~~loss per diluted common share after including interest expense related~~ to ~~convertible~~research ~~debentures~~ and ~~in-the-money~~development ~~potentially dilutive securities~~expenses.

~~The~~Share-Based ~~following table sets forth the computation of basic and diluted net loss per common share:~~Compensation

Basic income (loss) per common share:	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2010		2011			2010
Numerator:
Net income (loss)	$	11,301,607	$	3,041,069	$	2,439,411		$	(6,947,856	)
Denominator:
Basic weighted average number of common shares outstanding		47,323,880		47,313,880		47,320,728			47,313,880
Basic income (loss) per common share	$	0.24	$	0.06	$	(0.05	)	$	(0.15	)
Potentially dilutive securities:
Stock options						3,424,867			3,624,267
Warrants						49,784,000			51,183,890
Convertible debt and accrued interest						23,043,833			21,666,664

The Company accounts for its share-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation”, which establishes accounting for equity instruments exchanged for employee services and ASC Subtopic 505-50, “Equity-Based Payments to Non-Employees”, which establishes accounting for equity-based payments to non-employees. Under the provisions of ASC 718, share-based compensation is measured at the grant date, based upon the fair value of the award, and is recognized as an expense over the option holders’ requisite service period (generally the vesting period of the equity grant). The Company is required to record compensation cost for all share-based payments granted to employees based upon the grant date fair value, estimated in accordance with the provisions of ASC 718. Under the provisions of ASC 505-50, measurement of compensation cost related to common shares issued to non-employees for services is based on the value of the services provided or the fair value of the shares issued. The measurement of non-employee stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests.

12The fair value of the stock options at the grant date was estimated using the Black-Scholes option pricing mode. The risk-free interest rate for periods approximating the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected stock price volatility is based on historical volatility of the Company’s stock price. For post July 31, 2005 grants, the expected term until exercise is derived using the “simplified” method as allowed under the provisions of the SEC’s SAB No. 110, “Disclosures about Fair Value of Financial Instruments” and represents the period of time that options granted are expected to be outstanding.

Diluted loss per common share:	Three Months Ended January 31,						Six Months Ended January 31,
	2011			2010			2011
Numerator:
Net income	$	11,301,607		$	3,041,069		$	2,439,411
Add: Interest expense on convertible notes		61,231			51,444			122,462
Deduct: Debt discount and fair value change on derivative security		(12,072,034	)		(3,643,697	)		(3,900,978	)
Adjusted net loss	$	(709,196	)	$	(551,184	)		(1,339,105	)
Denominator:
Basic weighted average number of common shares outstanding		47,323,880			47,313,880			47,320,728
Add: Potentially dilutive securities
Warrants		11,818,180			21,666,664			12,107,842
Convertible notes		23,043,831			21,666,664			23,043,831
Diluted weighted average number of common shares		82,185,891			90,647,208			82,472,401
Diluted loss per common share	$	(0.01	)	$	(0.01	)	$	(0.02	)

Leases

~~4. SHARE~~With respect to our operating leases, the Company applies the provisions of FASB ASC Topic 840, “Leases”, recognizing rent expense on a straight-~~BASED~~line basis ~~COMPENSATION~~over the lease term due to escalating lease payments and landlord incentives.

In December 2004, the Financial Accounting Standards Board (“FASB”) issued amended guidance on accounting for “Stock Compensation”. The amended guidance requires all share-based payments, including stock option grants to employees, to be recognized as an operating expense in the statement of operations. The expense is recognized over the requisite service period based on fair values measured on the date of grant. The Company adopted the amended guidance on Stock Compensation effective August 1, 2005 using the modified prospective method and, accordingly, prior period amounts have not been restated. Under the modified prospective method, the fair value of all new stock options issued after July 31, 2005 and the unamortized fair value of unvested outstanding stock options at August 1, 2005 are recognized as expense as services are rendered.Contingencies

~~Shares,~~Liabilities ~~warrants and options have been issued to non-employees~~ for ~~services. The~~loss ~~fair~~contingencies arising ~~value~~from ofclaims, ~~such~~assessments, ~~securities~~litigation, isfines, ~~recorded~~and aspenalties ~~an expense~~ and ~~additional~~other ~~paid-in~~sources ~~capital~~are inrecorded ~~stockholders’~~when ~~equity~~it ~~over~~is ~~the~~probable ~~applicable~~that ~~service~~a ~~periods~~liability has ~~using~~been ~~variable~~incurred ~~accounting~~and ~~through~~ the ~~vesting~~amount ~~date based on the fair value~~ of the ~~securities~~liability atcan ~~the~~be ~~end~~reasonably ofestimated. ~~each~~Recoveries ~~period~~from orother ~~the~~parties ~~vesting~~are ~~date~~recorded when realized.

~~The~~Recently ~~Company~~Issued ~~recorded~~Accounting ~~the following stock-based compensation expense based on the fair value of stock options:~~Pronouncements

	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2010		2011		2010
Research and development	$	-	$	18,516	$	-	$	16,808
General and administrative		63,960		69,946		156,955		146,539
Total share-based compensation expense	$	63,960	$	88,462	$	156,955	$	163,347
Basic and diluted loss per common share	$	0.00	$	0.00	$	0.00	$	0.00

In June 2011, FASB issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 became effective for the Company on January 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.

~~The fair value of the stock options at the grant dates was estimated using the Black~~-~~Scholes option pricing model based on the weighted~~10-average assumptions as noted in the following table. The risk-free interest rate for periods approximating the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected stock price volatility is based on the historical volatility of the Company’s stock price. For post July 31, 2005 grants, the expected term until exercise is derived using the “simplified” method as allowed under the provisions of SAB 107 and SAB 110 and represents the period of time that options granted are expected to be outstanding. The “simplified” method was used since the Company does not have sufficient historical data to provide a basis to estimate a justifiable expected term. There were no stock options granted during the three months ended January 31, 2011 and 2010.

13In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs,” which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 became effective for the Company on January 1, 2012. The Company does not expect that the guidance effective in future periods will have a material impact on its financial statements.

	Three Months Ended January 31,				Six Months Ended January 31,
	2011		2010		2011			2010
Expected dividend yield		-		-		0	%		0	%
Risk-free interest rate		-		-		1.34	%		2.64	%
Expected stock price volatility		-		-		121.32	%		111.39	%
Expected term (years)		-		-		5.0			5.89
Weighted average grant date fair value		-		-	$	0.34		$	0.28

In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring.” This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a TDR remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on our financial statements.

~~The~~In ~~following~~January ~~table~~2010, ~~summarizes~~the FASB issued an amendment to ASC 820 to require reporting entities to separately disclose the ~~stock~~amounts ~~option~~and ~~activity~~business rationale for ~~the~~significant transfers ~~period~~in ~~August~~and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, ~~2010~~sale, issuance, toand ~~January~~settlement 31of Level 3 fair value measures on a gross basis. This standard is effective for interim and annual reporting periods beginning after December 15, ~~2011:~~2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard did not have a significant impact on the Company’s financial statements.

	Stock Options Outstanding			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance August 1, 2010		3,535,467		$	1.45		6.03	$	25,000
Granted		90,000			0.34		5.00
Exercised		(10,000	)		0.26			$	1,200
Expired		(190,600	)		2.85
Forfeited		—			-
Balance January 31, 2011		3,424,867		$	1.35		5.83	$	0
Exercisable as of January 31, 2011		2,091,517		$	1.20		4.70	$	0

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

AsNOTE of3 ~~January~~- ~~31,~~Restricted ~~2011, there was approximately $650,000 of total unrecognized compensation expense related to unvested options granted that is expected to be recognized over a weighted average period of 2.74 years.~~Cash

5Restricted cash was an escrow account held by a bank which can only disburse funds to satisfy obligations of the Company owed to clinical research organizations, hospitals, doctors and other vendors and service providers associated with the clinical trials which the Company intends to conduct for its ONCONASE® product. ~~RESTRICTED~~ ~~CASH~~ The escrow agreement governing the account terminated April 20, 2011, when all funds were disbursed from the escrow account.

Restricted cash is an escrow account held by a bank which can only disburse funds to satisfy obligations of the Company owed to clinical research organizations, hospitals, doctors and other vendors and service providers associated with the clinical trials which the Company intends to conduct for its ONCONASE® product. The escrow agreement governing the account shall terminate on the earlier of the date that all funds have been disbursed from the escrow account or April 19, 2011, at which time any remaining funds will be disbursed to the Company.-11-

14NOTE 4 - Net Income (Loss) Per Common Share

~~6. CONVERTIBLE~~The ~~NOTES~~following ~~AND~~table ~~WARRANTS~~sets forth the computation of basic and diluted net income (loss) per common share:

As previously disclosed in the Company’s Annual Report, the Company completed a sale of 65 units (the “Units”) in a private placement (the “Offering”) to certain investors pursuant to a securities purchase agreement (the “Securities Purchase Agreement”). Each Unit consists of (i) $50,000 principal amount of 5% Senior Secured Convertible Promissory Notes (collectively, the “Notes”) convertible into shares of the Company’s common stock, par value $.001 per share (“Common Stock”), (ii) Series A Common Stock Purchase Warrants (the “Series A Warrants”) to purchase in the aggregate that number of shares of Common Stock initially issuable upon conversion of the aggregate amount of Notes issued as part of the Unit, at an exercise price of $0.15 per share with a three-year term and (iii) Series B Common Stock Purchase Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Warrants”) to purchase in the aggregate that number of shares of Common Stock initially issuable upon conversion of the aggregate amount of Notes issued as part of the Unit, at an exercise price of $0.25 per share with a five-year term. The Offering closed on October 19, 2009 (the “Closing”) and the Company received an aggregate of $3,250,000 in gross proceeds.

	Three Months Ended April 30,					Nine Months Ended April 30,
	2011		2010			2011		2010
Numerator:
Net income (loss)	$	9,485,847	$	(6,911,805	)	$	11,925,257	$	(13,859,661	)
Denominator:
Weighted average number of common
shares outstanding		47,969,947		47,313,880			47,969,947		47,313,880

Income (loss) per common share:
Basic	$	0.20	$	(0.15	)	$	0.25	$	(0.29	)
Diluted	$	0.07	$	(0.15	)	$	0.04	$	(0.29	)
Potentially dilutive securities:
Warrants		52,284,000		51,183,890			52,284,000		51,183,890
Convertible notes (principal & interest)		22,503,653		22,233,557			22,503,653		22,233,557
Stock options		3,424,867		3,595,467			3,424,867		3,595,467
Total potentially dilutive securities		78,212,520		77,012,914			78,212,520		77,012,914

~~The~~As ~~Company accounts for~~ the ~~warrants and conversion options embedded in the Notes in accordance with ASC Topic 815, “Derivatives and Hedging”. Accordingly, the~~ Company ~~determined~~had ~~that~~incurred ~~the~~a ~~warrants~~net ~~and~~loss for the ~~conversion~~three ~~options embedded in the Notes should be accounted for as free standing derivatives that will be measured at fair value~~ and ~~classified~~nine asmonths ~~liabilities~~ended atApril ~~the~~30, ~~closing of the Offering. Each subsequent reporting period~~2010, ~~the~~basic ~~Company will mark to market the warrants~~ and ~~conversion~~diluted ~~feature~~per ofcommon ~~Notes~~share ~~with~~amounts ~~any~~are ~~change in fair value recorded through~~ the condensed statements of operations. This accounting treatment is due to the fact that the settlement terms of the warrants and conversion feature of the Notes do not allow them to qualify for equity presentation. Accordinglysame, onas ~~October 19, 2009, in connection with~~ the ~~closing~~inclusion of ~~the~~all potentially ~~Offering,~~dilutive ~~the~~securities ~~convertible~~would ~~feature~~be ~~of the Notes were recorded as a derivative liability of approximately $6~~anti-dilutive.~~1 million and the Series A and Series B warrants were recorded as a derivative liability of approximately $6.1 million each, respectively.~~

AtNOTE 5 the closing for the Offering, the fair value of the conversion feature, approximately $6.1 million, exceeded the proceeds of $3.25 million. The difference of approximately $2.9 million was charged to expense as the change in the fair market value of the conversion liability. Accordingly, the Company recorded an initial discount of $3.25 million equal to the face value of the Notes, which will be amortized over the three-~~year~~ ~~term,~~Property ~~using~~and ~~the straight-line method.~~Equipment

AtProperty January 31, 2011, the Company accounted for the conversion feature using the fair value method, with the resultant expense recognition recorded in the condensed statements of operations. The Company determined the fair value based on significant inputs not observable in the market and ~~thus represents a Level 3 measurement as defined in ASC 815. At January 31~~equipment, ~~2011,~~at ~~the fair value of the conversion feature liability was approximately $3.5 million~~cost, ~~comprised~~consists of the $6.1 million recorded at the closing for the Offering and $2.6 million gain recorded to mark-to-market the liability through January 31, 2011. The conversion feature was valued at October 19, 2009 and January 31, 2011 using the Black-Scholes valuation model and the following ~~assumptions~~:

	October 19, 2009			January 31, 2011
	April 30, 2011			July 31, 2010
Volatility		126	%		120.07	%
Laboratory equipment	$	276,202		$	276,202
Risk-free interest rate		1.50	%		0.58	%
Office equipment		111,049			111,049
Remaining contractual life (years)		3.0			1.72
Leasehold improvements		—			23,778
Less accumulated depreciation		(375,415	)		(378,435	)
Property and equipment, net	$	11,836		$	32,594

AtDepreciation ~~the~~for ~~Closing,~~ the ~~Company~~three ~~recorded the Series A~~ and nine ~~Series~~months Bended ~~warrants~~April as30, ~~liabilities~~2011 atand ~~their~~2010 ~~fair~~was ~~values~~$4,220 ofand ~~approximately~~ $~~6.1~~20,758, ~~million~~and ~~each~~$4,122 ~~based upon the Black-Scholes valuation model. The warrants will be accounted for using mark-to-market accounting~~ and ~~charged~~$74,494, ~~to the condensed statements of operations in a manner similar to the conversion feature at each reporting date~~respectively.

15NOTE 6 – Accrued Expenses

AtAccrued ~~January~~expenses ~~31,~~consisted ~~2011, the Company accounted for the warrant liabilities using the fair value method, with the resultant expense recognition recorded in the condensed statements~~ of ~~operations. At January 31, 2011,~~ the fair value of the Series A and Series B warrant liabilities were approximately $3.5 million and $4.1 million, respectively. The fair value of the Series A warrant is comprised of the $6.1 million recorded at the closing for the Offering and approximately $2.6 million gain recorded to mark to market the liability through January 31, 2011. The fair value of the Series B warrant is comprised of the $6.1 million recorded at the closing for the Offering and approximately $2 million gain recorded to mark-to-market the liability through January 31, 2011.following:

The Series A and Series B warrant liabilities were valued at October 19, 2009 and January 31, 2011 using the Black-Scholes valuation model and the following assumptions:

	April 30, 2011		July 31, 2010
Accrued clinical trial expenses	$	220,150	$	295,150
Accrued professional fees		342,604		374,361
Accrued compensation expenses		47,765		136,634
Other		—		200,152
Total accrued expenses	$	610,519	$	1,006,297

	Series A Warrants						Series B Warrants
	October 19, 2009			January 31, 2011			October 19, 2009			January 31, 2011
Volatility		126	%		120.07	%		113.17	%		128.89	%
Risk-free interest rate		1.50	%		0.58	%		2.36	%		1.46	%
Remaining contractual life (years)		3.0			1.72			5.0			3.72

-12-

InNOTE ~~addition,~~7 ~~the Company evaluated the classification of all non~~-~~employee~~ ~~share~~Convertible ~~commitments~~Notes issued outside of the plans which existed prior to the Offering (the “Prior Non-Employee Commitments”). As a result, at October 19, 2009, the Company reclassified $747,235 from equity to liability for all Prior Non-Employee Commitments and has included this amount as a part of derivative liability. The Company marked to market the Prior Non-Employee Commitments at April 27, 2010 and recorded a gain of $611,085 for the change in fair value from October 19, 2009 to April 27, 2010. On April 27, 2010, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation increasing the amount of authorized shares to cover all existing share commitments therefore, the marked-to-market liabilities for Prior Non-Employee Commitments were reclassified to equity in the amount of $136,150. Warrants

7On October 19, 2009, the Company completed a sale of 65 units (the “Units”) in a private placement (the “Offering”) to certain investors pursuant to a securities purchase agreement (the “Securities Purchase Agreement”). ~~CAPITAL~~ ~~STOCK~~Each Unit consists of (i) $50,000 principal amount of 5% Senior Secured Convertible Promissory Notes (collectively, the “Notes”) convertible into shares of the Company’s common stock, par value $.001 per share (“Common Stock”), (ii) Series A Common Stock Purchase Warrants (the “Series A Warrants”) to purchase that number of shares of Common Stock initially issuable upon conversion of the Notes issued as part of the Unit, at $0.15 per share with a three year term and (iii) Series B Common Stock Purchase Warrants (the “Series B Warrants”, together with the Series A Warrants, the “Warrants”) to purchase that number of shares of Common Stock initially issuable upon conversion of the aggregate amount of Notes issued as part of the Unit, at $0.25 per share with a five year term. The closing of the Offering occurred on October 19, 2009 (the “Closing”) and the Company received $3,250,000 in gross proceeds.

InAt ~~September~~April ~~2010~~30, 2011, the Company ~~issued~~accounted 90for the conversion feature using the fair value method,~~000~~ ~~five-year~~with ~~stock~~the ~~options~~resultant togain arecognition ~~consultant~~recorded asin ~~payment~~the ~~for~~statement ~~services~~of ~~rendered~~operations. ~~The~~ At ~~options~~April ~~vested~~30, ~~immediately~~2011, ~~and~~the ~~had~~fair anvalue ~~exercise~~of ~~price~~the ofconversion feature liability was $02.342 ~~per share~~million. The ~~total~~fair ~~general~~value ~~and~~of ~~administrative~~the ~~expense~~conversion ~~recorded~~feature was $6.1 million at the closing for ~~these~~the ~~options~~Offering ~~was~~and $~~25,380,~~5.2 ~~based~~million ~~upon~~at ~~the~~July ~~fair~~31, ~~value~~2010. ofThe ~~such~~conversion ~~options~~feature onwas ~~the~~valued ~~date~~at ofApril 30, ~~issuance~~2011 asand ~~estimated~~July by31, 2010 using the Black-Scholes ~~options-pricing~~valuation model. and the following assumptions:

In October 2010, the Company issued 10,000 shares of its common stock upon the exercise of stock options by an employee at a share exercise price of $0.26. The Company realized gross proceeds of $2,600 from this exercise.

	April 30, 2011			July 31, 2010
Volatility		117.87	%		153.71	%
Risk-free interest rate		0.42	%		0.55	%
Remaining contractual life (years)		1.47			2.22

InAt ~~January~~the ~~2011~~Closing, the Company ~~realized~~recorded ~~gross~~the ~~proceeds~~Series A ofand ~~$500,000~~Series ~~for~~B ~~common~~warrants ~~stock~~as toliabilities beat ~~issued~~their atfair values of $06.201 ~~per~~million ~~share. The~~each, ~~Company~~based ~~will~~upon ~~issue~~the ~~2,500,000~~Black-Scholes ~~shares~~valuation ofmodel. The ~~its~~warrants ~~common~~were ~~stock~~accounted ~~and~~for ~~2,500,000~~using ~~five~~mark-~~year~~to-market ~~warrants~~accounting ~~with~~and ancharged ~~exercise~~to ~~price~~the statement of ~~$0.50~~operations ~~per~~in ~~share~~a manner similar to the conversion feature at each reporting date.

8At April 30, 2011, the Company accounted for the warrant liabilities using the fair value method, with the resultant gain recognition recorded in the statement of operations. ~~REVENUE~~ At ~~RECOGNITION~~April 30, 2011, the fair value of the Series A and Series B warrant liabilities were $2.2 million and $3.0 million, respectively. The fair value of the Series A warrants was $6.1 million at the closing for the Offering and $5.2 million at July 31, 2010. The fair value of the Series B warrant was $6.1 million at the closing for the Offering and $5.1 million at July 31, 2010. The Series A and Series B warrant liabilities were valued at April 30, 2011 and July 31, 2010 using the Black-Scholes valuation model and the following assumptions:

The Company recognizes revenue in accordance with SAB No. 104, “Revenue Recognition” issued by the staff of the SEC. Under SAB 104, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured.

	Series A Warrants				Series B Warrants
	April 30, 2011		July 31, 2010		April 30, 2011		July 31, 2010
Volatility	117.87	%	153.71	%	134.85	%	123.44	%
Risk-free interest rate	0.42	%	0.55	%	1.01	%	1.22	%
Remaining contractual life (years)	1.47		2.22		3.47		4.22

16NOTE 8 - Stockholders' Equity

~~The~~On ~~Company~~April ~~enters into marketing and distribution agreements~~27, which contain multiple deliverables. The Company evaluates whether these deliverables constitute separate units of accounting to which total arrangement consideration is allocated. A deliverable qualifies as a separate unit of accounting when the item delivered to the customer has standalone value2010, ~~there~~at ~~is objective and reliable evidence of fair value of items that have not been delivered to~~ the ~~customer~~Company’s ~~and~~annual stockholders’ ~~if there is a general right of return for the items delivered to the customer~~meeting, ~~delivery or performance of~~ the ~~undelivered items is considered probable and substantially in the control of the~~ Company~~. Arrangement~~’s ~~consideration~~stockholders isapproved ~~allocated~~an amendment to ~~units of accounting on a relative fair-value basis if~~ the Company’s isCertificate ~~unable to determine the fair value~~ of ~~all~~Incorporation, as ~~deliverables~~amended, ~~in the arrangement. Consideration allocated~~ to aincrease ~~unit of accounting is limited to~~ the ~~amount~~number ~~that is not contingent upon future performance by the Company. Upon determination~~ of ~~separate~~shares ~~units~~ of ~~accounting~~common ~~and~~stock ~~allocated~~authorized ~~consideration~~from 100,000,000 ~~the general criteria for revenue recognition is applied~~ to ~~each unit of accounting~~250,000,000.

InDuring ~~January~~fiscal ~~2008~~2010, the Company ~~entered~~issued ~~into a U.S. License Agreement for ONCONASE® with Par Pharmaceutical~~11,667 stock ~~Inc.~~options ~~(“Par”). Under~~to ~~the~~its ~~terms~~former member of the ~~License~~Board ~~Agreement, Strativa Pharmaceuticals (“Strativa”), the proprietary products division~~ of ~~Par,~~Directors ~~received~~at ~~exclusive~~$0.34 ~~marketing,~~per ~~sales~~share and ~~distribution~~a ~~rights~~five-year toterm. ~~ONCONASE®~~The ~~for~~grant ~~the~~date ~~treatment~~fair value of ~~cancer~~these inoptions ~~the~~of ~~United States and its territories. The Company retained all rights and obligations for product manufacturing~~$2,812 ~~clinical~~was ~~development~~recognized ~~and obtaining regulatory approvals,~~ as ~~well~~an asexpense ~~all rights~~ for ~~those non-U.S. jurisdictions in which~~ the ~~Company~~fiscal ~~has~~year ~~not~~ended ~~currently~~July ~~granted~~31, ~~any such rights or obligations to third parties~~2010. ~~The Company received a cash payment of $5 million upon the signing of the License Agreement.~~

On September 8, 2009, the Company and Par entered into a Termination and Mutual Release Agreement (the “Termination Agreement”) pursuant to which the Company’s License Agreement and Supply Agreement with Par were terminated. The License Agreement was terminated and all rights under the license granted to Par reverted back to the Company under the Termination Agreement. Under the Supply Agreement, the Company had agreed to supply all of Par’s requirements for ONCONASE®. Pursuant to the Termination Agreement, Par will be entitled to a royalty of 2% of net sales of ONCONASE® or any other ranpirnase product developed by the Company for use in the treatment of cancer in the United States and its territories commencing with the first sale of such product and terminating upon the later to occur of the twelfth anniversary of the first sale and the date of expiration of the last valid claim of a pending application or issued patent owned or controlled by the Company with respect to such product.-13-

~~The~~During ~~Company~~fiscal ~~has~~2010, ~~evaluated~~the ~~both~~Company ~~the~~issued ~~License~~430,000 stock ~~Agreement~~options ~~and~~to the ~~Termination~~independent ~~Agreement~~members ~~and~~of ~~has~~its ~~determined~~Board ~~that~~of ~~the~~Directors ~~Company~~with isan ~~obligated~~exercise toprice ~~provide~~of ~~royalty~~$0.26 ~~payments~~per inshare ~~the~~and ~~event~~a ~~the~~68 ~~Company~~month ~~has~~term. The ~~net~~grant ~~sales. As~~date ~~such,~~fair asvalue of ~~January~~these ~~31,~~options ~~2011~~of $85,570 is being amortized over the ~~Company~~eight-month ~~has~~vesting ~~not~~period. The Company recognized ~~into~~compensation ~~income~~expense ~~any~~ of ~~the~~ $531,447 ~~million~~for ~~upfront~~the ~~payment~~fiscal ~~received~~year ~~under~~ended ~~the~~July ~~License~~31, ~~Agreement~~2010.

9During the nine months ended April 30, 2011, the Company issued 90,000 stock options to a non-employee consultant for services rendered. ~~COMMITMENTS~~ The options vested immediately at an exercise price of $0.34 per share and a five-year exercise term. The grant date fair value of these options, $25,380, was recognized as an expense by the Company during the nine months ended April 30, 2011. During the nine months ended April 30, 2011, the Company issued 10,000 shares of its common stock upon the exercise of stock options by an employee at $0.26. The Company realized $2,600 from this exercise.

~~Employment~~In April 2011, the Company completed the sale of 2,500,000 shares of its common stock and ~~Retirement~~the ~~Agreements~~issuance of warrants to purchase 2,500,000 common shares pursuant to an agreement with Unilab LP. The Company received proceeds of $500,000. The warrants have a 5-year term and a purchase price of $0.50 per share. As of April 2011, the fair value of these warrants was $0.2 million. The warrants were valued using the Black-Scholes valuation model and the following assumptions:

There have been no material changes with respect to the Company’s employment and retirement agreements as disclosed in the “Notes to the Financial Statements – Commitments” in the Company’s Annual Report.

	April 2011
Volatility		143.73	%
Risk-free interest rate		2.07	%
Remaining contractual life (years)		5.00

~~Lease~~These ~~Commitments~~warrants have standard antidilutive provisions, as such, they were classified as equity instruments and recorded as a change and credit to additional paid-in capital.

~~There~~NOTE 9 ~~have~~- ~~been~~Common noStock ~~material~~Warrants ~~changes with respect to the Company’s operating leases as disclosed in the “Notes to the Financial Statements – Commitments” in the Company’s Annual Report.~~

17The following table summarizes the activity of common stock warrants issued in connection with the private placements and conversion of notes payable completed in fiscal 2010 and the nine months ended April 30, 2011:

10. CONTINGENCIES

	Warrants			Exercise Price		Expiration
Outstanding at July 31, 2009		8,495,650			1.00 - 2.88		9/14/09 to 7/17/11
Expired		(2,044,978	)		1.00		9/14/09 to 5/6/10
Issued to related parties in connection with conversion of notes payable		13,333,332			0.15 – 0.25		10/19/12 to 10/19/14
Issued to unrelated parties in connection with conversion of notes payable		29,999,996			0.15 – 0.25		10/19/12 to 10/19/14
Outstanding at July 31, 2010		49,784,000			$0.15 - $2.88		7/17/11 to 10/19/14
Expired		—			—		—
Issued to unrelated parties		2,500,000			0.50		04/07/2016
Outstanding at April 30, 2011		52,284,000			$0.15-2.88		7/17/11 to 4/7/16
Exercisable at April 30, 2011		52,284,000			$0.15-2.88		7/17/11 to 4/7/16

Except for the disclosure below, there have been no material changes with respect to the Company’s contingencies as disclosed in the “Notes to the Financial Statements – Contingencies” in the Company’s Annual Report.-14-

InNOTE ~~February~~10 ~~2011, the Company terminated its contract with the clinical research organization (“CRO”) upon the Company’s decision to suspend the Phase II non~~-~~small~~ ~~cell~~Stock ~~lung trial. No termination fees were paid to the CRO.~~Options

182004 Stock Incentive Plan

~~Item~~The ~~2. Management~~Company's ~~Discussion~~stockholders approved the 2004 Stock Incentive Plan (the “2004 Plan”) for the issuance of up to 8,500,000 shares, which provides that common stock and ~~Analysis~~stock options may be granted to employees, directors and consultants. The 2004 Plan provides for the granting of ~~Financial~~stock options, ~~Condition~~stock appreciation rights, restricted shares, or other share based awards to eligible employees and ~~Results~~directors, as defined in the 2004 Plan. Options granted under the 2004 Plan will have an exercise price equal to the market value of ~~Operations~~the Company’s common stock on the date of the grant. The term, vesting period and time and method of exercise of options granted under the 2004 Plan are fixed by the Board of Directors or a committee thereof.

~~The~~1997 ~~following~~Stock ~~discussion~~Option of our financial condition and results of operations should be read together with our financial statements and notes to those statements included in Item 8 of Part II of our Annual Report and our financial statements for the three and six month periods ended January 31, 2011 included elsewhere in this report.Plan

~~Overview~~The Company’s stockholders approved the 1997 stock option plan for the issuance of options for up to 2,000,000 shares, which provides that options may be granted to employees, directors and consultants. Options are granted at market value on the date of the grant and generally are exercisable in 20% increments annually over five years starting one year after the date of grant and terminate five years from their initial exercise date. This plan expired in May 2007 except to the extent there are outstanding options.

We1993 ~~are~~Stock aOption biopharmaceutical company engaged in the research, development, and commercialization of drugs for life threatening-diseases, such as malignant mesothelioma and other cancers. Our corporate strategy is to become a leader in the discovery, development, and commercialization of novel ribonuclease (RNase) therapeutics for cancer and other life-threatening diseases. To date, we have three full-time employees who conducted all administrative and research and development operations at our facility in Monmouth Junction, New Jersey. Plan

WeThe ~~are~~Company's astockholders ~~development~~approved the ~~stage~~1993 ~~company~~stock asoption ~~defined~~plan infor the ~~Accounting~~issuance ~~Standards~~of ~~Codification~~options ~~(“ASC”)~~for ~~Topic~~up ~~915~~to 3,000,000 ~~“Development~~shares, ~~Stage~~which ~~Entities”~~provides that options may be granted to employees, directors and consultants. We Options are ~~devoting~~granted ~~substantially~~at ~~all~~market value on the date of ~~our~~the ~~present~~grant ~~efforts~~and togenerally ~~establishing~~are aexercisable in ~~new~~20% ~~business~~increments ~~and~~annually ~~developing~~over ~~new~~five ~~drug~~years ~~products.~~starting ~~Our~~one ~~planned~~year ~~principal~~after ~~operations~~the date of ~~marketing~~grant and~~/or~~ ~~licensing~~terminate ~~new~~five ~~drugs~~years ~~have~~from ~~not~~their ~~commenced~~initial exercise ~~and,~~date. ~~accordingly,~~This weplan ~~have~~expired ~~not~~in ~~derived~~November ~~any~~2003 ~~significant~~except ~~revenue~~to ~~from~~the ~~these~~extent ~~operations~~there are outstanding options.

~~Since~~The ~~our~~fair ~~inception~~value inof ~~1981,~~the westock ~~have~~options at ~~devoted~~ the ~~vast~~grant ~~majority~~date ofwas ~~our~~estimated ~~resources~~using to the ~~research~~Black-Scholes ~~and~~valuation ~~development~~model ofand ~~ONCONASE®, our lead drug candidate, as well as other related drug candidates. In recent years we have focused our resources towards~~ the ~~completion~~following ofassumptions: ~~the~~For ~~clinical~~post ~~program~~July ~~for ONCONASE® in patients suffering from unresectable~~31, or2005 ~~inoperable~~grants, the ~~malignant~~expected ~~mesothelioma~~term ~~(“UMM”). We~~until ~~have~~exercise ~~incurred~~is ~~losses~~derived ~~since~~using ~~inception~~the ~~and we have not received Food and Drug Administration (~~“~~FDA~~simplified”) ~~approval~~method ~~of any of our drug candidates. We expect to continue to incur losses for the foreseeable future~~ as weallowed ~~continue~~under ~~our research and development activities, which may include~~ the ~~sponsorship~~provisions of ~~human~~the ~~clinical~~SEC’s SAB ~~trials for our drug candidates~~No. ~~Until~~ ~~we are able to consistently generate revenue through the sale of products~~110, we“Disclosures ~~anticipate~~about ~~that~~Fair weValue ~~will be required to fund the development~~ of ~~our~~Financial ~~pre-clinical~~Instruments” ~~compounds~~ and ~~drug~~represents ~~product candidates primarily by other means, including, but not limited to, licensing~~ the ~~development~~period ~~or marketing rights to some~~ of ~~our~~time ~~drug~~that ~~candidates~~options granted toare ~~third~~expected ~~parties, collaborating with third parties~~ to ~~develop~~be ~~our drug candidates, or selling Company issued securities~~outstanding.

Almost all of the $73.7 million of research and development expenses we have incurred since our inception has gone toward the development of ONCONASE® and related drug candidates. For the three and six months ended January 31, 2011 and for fiscal years ended July 31, 2010 and 2009, our research and development expenses were approximately $0.4 million, $0.6 million, $0.5 million and $3.3 million, respectively, almost all of which were used for the development of ONCONASE® and related drug candidates. We cannot predict with certainty what our total cost associated with obtaining marketing approvals will be, and we are unable to predict when and if such approvals will be granted, or if and when actual sales will occur.

	Three Months Ended April 30,					Nine Months Ended April 30,
	2011		2010			2011			2010
Expected dividend yield		—		0	%		0	%		0	%
Risk-free interest rate		—		1.61	%		1.34	%		2.17	%
Expected volatility		—		131.63	%		121.32	%		120.63	%
Expected term (years)		—		3.18			5.00			4.66
Weighted average fair value of options at grant date		—	$	0.20		$	0.34		$	0.25

~~As previously disclosed, we had an agreement with the National Institute of Allergy and Infectious Diseases (NIAID) to screen our compounds (ONCONASE®, P31, rAmphinase 2) for its potential anti~~-viral activity. In July 2010, scientists supported by NIAID reported positive in vitro results after testing our compounds for Dengue fever and Yellow fever. According to the scientists supported by NIAID, these results have rarely been seen before. Currently there is no therapy available to treat Dengue and Yellow fever post15-infection. Further in vitro studies for the Severe Acute Respiratory Syndrome (SARS) virus, and Cytomegalovirus (CMV), have also yielded positive results. In the case of CMV, a virus that is a member of the herpesvirus family, our compounds were compared to Ganciclovir, a drug marketed by Roche. Results confirmed that two of our compounds were between three and eleven times more potent than Ganciclovir in a head-to-head comparison. Moreover, our compounds did not display the level of toxicity inherent with any of the drugs approved by the FDA for CMV disease. None of the approved drugs for this indication are well tolerated by patients. In 2008, the market for CMV drugs was $600 million with Ganciclovir controlling over 90% of the market. Industry observers estimate that sales for CMV disease would top one billion dollars if there were a drug available that was both safe and effective. Based upon the results of the in vivo studies conducted to date, we anticipate starting in vivo studies for Yellow fever in the late first calendar quarter of 2011. Subject to the availability of funding, studies for Dengue fever, CMV and HPV are anticipated to commence in the second calendar quarter of 2011.

19Option Activity

~~As previously reported, we sent four of our compounds (ONCONASE®, P31, rAmphinase 2, natural Amphinase 3) to the National Cancer Institute (NCI) for their sixty cell line screening study.~~ The ~~results~~following oftable ~~the~~summarizes ~~one~~stock option ~~dose screening study performed at NCI resulted in positive anti-cancer~~ activity ~~across~~for ~~several different cancer cell lines tested. Due to~~ the ~~one~~period ~~dose~~July ~~positive results~~31, ~~NCI~~2009 ~~recommended~~through ~~further~~April ~~screening of our compounds at five different dose levels. NCI reported the results of the sixty cell line screening at five different dose levels. These results were quite positive~~30, and our compounds were recommended for further pre-clinical and clinical evaluation. We have initiated discussions with NCI and are currently seeking support for further pre-clinical and clinical development of our compounds.2011:

In February 2011, based upon the previously reported positive results of the in vivo studies performed at the NIAID for Yellow fever, Dengue fever, CMV, SARS and HPV, we decided to focus our resources to further these studies. Therefore, we placed on hold the Phase II trial of ranpirnase (ONCONASE®) in patients suffering from non-small cell lung cancer. We continue to seek financing required to allow us to continue pursuing the development of ranpirnase.

	Shares Available for Grant			Options Outstanding			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance July 31, 2009		5,012,500			4,771,650		$	2.64
Granted		(941,667	)		941,667			0.30
Cancelled/Expired		1,096,500			(2,169,850	)		3.56
Forfeited		8,000			(8,000	)		1.29
Balance July 31, 2010		5,175,333			3,535,467			1.45		6.03	$	25,000
Granted		(90,000	)		(90,000	)		0.34
Cancelled/Expired		50,000			190,600			2.85
Exercised		—			(10,000	)		0.26
Balance April 30, 2011		5,135,333			3,424,867			1.35		5.59	$	0
Exercisable at April 30, 2011					2,091,517		$	1.20		4.46	$	0

WeAt ~~fund~~April the research and development of our products primarily from cash receipts resulting from the sale of our equity securities and convertible debentures in registered offerings and private placements. Additionally30, ~~we have raised capital through other debt financings~~2011, the ~~sale~~Company reversed ~~of our tax benefit and research credits~~$1, ~~interest income and financing received from Kuslima Shogen~~318,126 ~~our~~compensation ~~former~~expense ~~Chief~~related ~~Executive Officer. Our current cash reserves will be used~~ to ~~fund~~1,000,000 ~~our~~performance ~~clinical~~stock ~~and~~options ~~pre-clinical~~issued ~~research~~in ~~and~~April ~~development efforts for ranpirnase~~2008. The ~~most~~Company ~~significant~~concluded that ~~expenses will be incurred for~~ the ~~currently~~performance ~~anticipated~~condition inwas ~~vivo~~deemed ~~studies~~improbable ~~for~~as ~~Yellow~~of ~~fever,~~February ~~Dengue~~2011; ~~fever~~therefore, ~~CMV~~the ~~and~~expense ~~HPV. Additional expenses are also expected~~ to-date bewas ~~incurred~~reversed asin wethe ~~continue~~general and toadministrative ~~move~~expenses ~~our~~in ~~drug~~accordance ~~product~~with ~~candidates~~FASB ~~towards~~ASC ~~the~~Topic ~~next~~718, ~~phase~~“Compensation of– ~~clinical~~Stock ~~and pre-clinical development~~Compensation”.

WeNOTE ~~have~~11 ~~incurred~~- ~~losses~~Subsequent since inception and, to date, we have generated only small amounts of capital from marketing and distribution agreements for ONCONASE®. Our audited financial statements for the fiscal year ended July 31, 2010, were prepared under the assumption that we will continue our operations as a going concern. We were incorporated in 1981 and have a history of losses and negative cash flows from operating activities. As a result, our independent registered public accounting firm in their audit report has expressed that there was substantial doubt about our ability to continue as a going concern. Continued operations are dependent on our ability to raise additional capital from various sources such as those described above. Such capital raising opportunities may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.Events

WeOn ~~may~~December ~~seek~~16, to2011, ~~satisfy~~the ~~future~~Board determined ~~funding~~the ~~requirements~~employment ~~through public or private offerings~~ of ~~securities~~Charles ~~or with collaborative or other arrangements with corporate partners. Additional financing or strategic transactions may not be available when needed or on terms acceptable to us~~Muniz, ~~if at all. If adequate financing is not available~~President, weChief ~~may~~Executive beOfficer ~~required to delay, scale back, or eliminate certain of our research~~ and ~~development~~Chief ~~programs,~~Financial ~~relinquish~~Officer ~~rights to certain~~ of ~~our technologies~~Tamir, ~~drugs or products, or license third parties to commercialize products or technologies that we~~ would ~~otherwise seek to develop ourselves~~end.

20On December 23, 2011, the Board appointed Lawrence A. Kenyon as interim Chief Executive Officer and Chief Financial Officer of Tamir, effective immediately. Mr. Kenyon entered into a consulting agreement with the Company pursuant to which he received monthly salary of $5,000.

~~Liquidity~~On November 23, 2011, Tamir entered into a Memorandum of Understanding (“MOU”), with US Pharmacia, (hereafter “USPI”), pursuant to which USPI, will be granted the exclusive marketing , sales, and ~~Capital~~distribution ~~Resources~~rights of ONCONASE® for use in HPV in the European Territory upon completion of full License payment. Territory includes Western and Eastern Europe. USPI was to pay Tamir $1 million in installments provided Tamir achieves certain milestones. Under the MOU, on December 12, 2011, Tamir received an initial payment of $405,000 and Tamir provided USPI with Proof of Concept demonstrating successful drug formulation of ONCONASE® which will be used to treat genital and skin warts caused by the HPV and in vivo penetration of ONCONASE® into the skin. Tamir provided this Proof of Concept by March 31, 2011. USPI has further agreed to make a $95,000 milestone payment to Tamir, for the completion of a topical formulation and initiation of testing of ONCONASE® in the HPV Proof of Concept study. On June 13, 2012, Tamir received initial results from the independent laboratory performing the ongoing non-clinical Proof of Concept study of ONCONASE® as a potential HPV. Once other pre-clinical milestones are met USPI shall pay Tamir the balance of $500,000 in installments.

WeThe ~~have~~terms ~~reported~~of ~~cumulative~~the ~~net~~License ~~losses~~Agreement shall ofbe ~~approximately~~agreed ~~$18.7~~upon ~~million~~by ~~for~~the parties as outlined in the ~~two~~MOU. ~~most~~Tamir ~~recent~~will ~~fiscal~~also ~~years~~be ~~ended~~entitled ~~July~~to ~~31,~~receive ~~2010. The~~milestone ~~net~~payments ~~losses~~based ~~from~~on the ~~date~~achievement of ~~inception,~~certain ~~August~~regulatory ~~24,~~approvals ~~1981~~and tocertain ~~January~~sales ~~31,~~goals. ~~2011~~In ~~amount~~addition, toTamir ~~approximately~~will ~~$120.7~~receive ~~million. As~~a ofroyalty ~~January~~on ~~31,~~net ~~2011,~~sales as wewell ~~have~~as a ~~working~~transfer ~~capital~~price ~~deficit~~for ofproduct ~~approximately~~sold ~~$11.2~~by ~~million~~Tamir to USPI.

We have financed our operations since inception primarily through the sale of our equity securities and convertible debentures in registered offerings and private placements. Additionally, we have raised capital through other debt financings, the sale of our state tax benefit and research products, and investment income and financing received from Kuslima Shogen, our former Chief Executive Officer. As of January 31, 2011, we had approximately $0.7 million in cash and cash equivalents. We currently believe that our cash reserves, including the approximately $0.3 million restricted cash intended for future clinical trials, can support our activities into our first fiscal quarter ending October 2011, based upon our reduced operations.-16-

~~The~~Tamir ~~use of our cash~~ will be toresponsible ~~fund~~for making ~~our~~regulatory ~~clinical~~filings ~~and~~with ~~pre-clinical research~~ and ~~development~~seeking ~~efforts~~marketing ~~for~~approval ~~ranpirnase. The~~of ~~most~~ONCONASE® ~~significant~~in ~~expenses will be incurred for~~ the ~~currently~~Territory ~~anticipated in vivo studies for Yellow fever, Dengue fever, CMV~~ and ~~HPV. Additional~~manufacturing ~~expenses are also expected to be incurred as we continue to move our drug product candidates towards the next phase of clinical~~ and supplying ~~pre-clinical~~ONCONASE® ~~development. We will need~~ to ~~obtain additional financing in order to continue our operations~~USPI. ~~Given~~ ~~current~~USPI ~~market~~will ~~conditions, it may~~ be ~~very~~responsible ~~difficult,~~for ifall ~~not~~commercial ~~impossible,~~activities toand ~~obtain~~related ~~such~~costs ~~financing. In~~in ~~order to continue our operations we will need to pursue strategic alternatives for~~ the ~~further development of ONCONASE®~~Territory.

~~The~~On ~~report~~May of30, ~~our~~2012, ~~independent~~Tamir ~~registered~~was ~~public~~served with ~~accounting~~a ~~firm~~complaint onfiled ~~our~~by ~~fiscal~~its ~~year~~current ~~ended~~board ~~July~~member 31and former President and Chief Executive Officer, ~~2010~~Charles ~~financial~~Muniz, ~~statements~~in ~~expressed~~the Superior Court of New Jersey, Middlesex County. In the complaint Mr. Muniz alleges his employment with Tamir was wrongfully terminated and that ~~there~~such termination was ~~substantial~~in ~~doubt~~retaliation ~~about~~for ~~our~~his ~~ability~~complaints to ~~continue~~the asBoard. aMr. ~~going~~Muniz ~~concern. Continued~~claims ~~operations~~the ~~are~~Board ~~dependent~~failed onto ~~our~~disclose ~~ability~~material and significant information to ~~raise~~investors ~~additional~~and ~~capital~~shareholders ~~from~~about ~~various~~ONCONASE® ~~sources~~for HPV and that such asfailure ~~those~~to ~~described~~disclose such ~~above. Such~~information ~~capital~~constituted ~~raising~~unlawful ~~opportunities~~deception, ~~may~~misrepresentation, ~~not~~violation beof ~~available~~the orboard’s ~~may~~fiduciary ~~not~~responsibilities beand fraudulent ~~available~~activity. onMr. ~~reasonable~~Muniz ~~terms~~is seeking unspecified damages. ~~Our~~ ~~financial~~Tamir ~~statements~~believes doMr. ~~not~~Muniz’s ~~include~~allegations ~~any~~are ~~adjustments~~without ~~that~~merit ~~may~~and intends ~~result~~to defend itself from his claims to the ~~outcome~~extent ofit ~~this~~has ~~uncertainty~~the resources to do so.

~~Results~~Although Mr. Muniz’s complaint does not specify what information about ONCONASE® for HPV he alleges the Board failed to disclose, based upon communications the Board of ~~Operations~~Directors has received from Mr. Muniz, Tamir believes that Mr. Muniz is referring to his contention that passive transdermal delivery of large molecular weight molecules was not scientifically possible and that Tamir should not pursue the development of such a formulation of ONCONASE®. Although the preliminary test results discussed above need to be further evaluated through testing, Tamir believes that these preliminary test results demonstrate that Mr. Muniz’s contention that passive transdermal delivery of large molecular weight molecules, specifically ONCONASE®, was scientifically impossible, is incorrect. As was explained to Mr. Muniz numerous times before he filed his lawsuit, the Board made a determination to pursue the development of several formulations of ONCONASE® that could achieve passive transdermal delivery, based upon reasonable scientific processes and the emergence of new powerful patented formulations that facilitate transdermal delivery of large molecular weight molecules that might make it possible to develop such a formulation for ONCONASE®. The Board’s decision was also based upon the fact that Tamir had essentially no cash remaining, USPI was the company’s only funding source and USPI was only willing to fund the development of such a formulation of ONCONASE®. During his tenure as CEO, Mr. Muniz was unable to secure a partner or investors willing to fund any formulation of ONCONASE® for the treatment of HPV other than those formulations that Tamir has pursued.

~~Three~~On ~~month~~October ~~periods~~18, ~~ended~~2012, ~~January~~by 31action of a majority of the holders (the “Required Holders”) of the Tamir Biotechnology, ~~2011~~Inc. ~~and~~5% ~~2010~~Senior Secured Convertible Promissory Notes (the “Notes”), the maturity date of the Notes was changed from October 19, 2012 to February 16, 2013 or such earlier date on which demand is made by the Required Holders. No other changes were made to the Notes with this amendment.

WeOn ~~focus~~December ~~most~~14, 2012, we completed a private placement of ~~our~~10 ~~productive~~“Units” at $100,000 per Unit, for gross consideration of $1 million (the “Offering”), pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) dated as of December 11, 2012. Each Unit consisted of (i) 13,846,945 shares of the Company’s common stock, par value $.001 per share (“Common Stock”), (ii) 1,000 shares of Series A Convertible Preferred Stock of the Company (the “Preferred Shares”), each such Preferred Share being initially convertible into 17,718.52 shares of Common Stock, and ~~financial~~(iii) ~~resources~~10-year Common Stock Purchase Warrants (the “Warrants”), to purchase 12,626,184 shares of Common Stock at $0.003168 per share. Upon completion of Offering, there were issued and outstanding approximately 577,000,000 shares of Common Stock on a fully-diluted basis, of which 315,654,607 (or 70%) were issued in the ~~development~~Offering. The Company’s Certificate of ~~ONCONASE®~~Incorporation only authorizes the issuance of 250,000,000 shares of Common Stock. The Preferred Shares issued in the Offering, which are convertible into 177,185,153 shares of Common Stock, will automatically convert into shares of the Common Stock on the date the Company files an amendment to its Certificate of Incorporation increasing the authorized number of shares of Common Stock and/or effecting a reverse stock split so that the Company has a sufficient number of authorized and unissued shares of Common Stock so as ~~such~~to wepermit ~~did~~the ~~not~~conversion ~~have~~of ~~any~~all ~~material~~outstanding Preferred ~~sales~~Shares inand all other convertible securities of the ~~three~~Company. ~~month~~Based ~~periods~~on ~~ended~~the ~~January~~fact 31that the Company does not have enough authorized shares, ~~2011~~the warrants will be accounted as liability instruments and ~~2010~~valued at the fair value and marked to market.

Research and development expense for the three month period ended January 31, 2011 was approximately $0.4 million compared to approximately $0.1 million for the same period in 2010, an increase of approximately $0.3 million. The increase was primarily related to the initiation and thereafter, suspension of the Phase II clinical trial of ONCONASE® for the treatment of non-~~small cell lung cancer.~~17-

~~General~~In connection with the Offering, and ~~administrative~~as ~~expense~~a condition precedent thereto under the Purchase Agreement, the holders of a majority in principal amount (the “Requisite Holders”) of the Company’s outstanding 5% Senior Secured Convertible Promissory Notes (the “Notes”), entered into a Consent and Waiver (the “Consent”) under which (i) the Notes were amended to provide for the ~~three~~automatic ~~month~~conversion of ~~period~~the ~~ended~~outstanding ~~January~~principal 31and interest of all of the Notes upon the election of the Requisite Holders, ~~2011~~(ii) ~~was~~the ~~approximately~~Requisite Holders elected to convert all outstanding principal and interest under the Notes, in the aggregate amount of $3,891,838, into shares of Common Stock at a price $0.315 ~~million~~per ~~compared~~share to(the ~~approximately~~conversion price under the Notes), and (iii) the exercise price of the Series B Warrants held by the holders of the Notes were reduced from $0.425 ~~million~~per ~~for~~share to $0.01 per share. The Required Holders consented to the ~~same~~Company’s license ~~period~~of inONCONASE® ~~2010~~to James O. McCash (“McCash”) and/or his affiliates (such licensee being referred to herein as the “Licensee”), on terms which included (i) the issuance to the Licensee of a ~~decrease~~warrant to purchase 23,750,000 shares of ~~approximately~~the Company’s common stock at an exercise price of $0.101 ~~million~~per share, (ii) no other payments or ~~34%. This~~other ~~decrease~~consideration provided, ~~was~~or ~~primarily~~expenditures ~~due~~incurred by, the Company to ~~decreased~~the ~~professional~~Licensee ~~fees~~in connection with such License, and ~~other~~(iii) the entry by McCash and affiliated stockholders of the Company into a general ~~administrative~~release ~~expenses~~in favor of the Company.

21In connection with the Offering, the Company also entered into a Third Amendment to Investor Rights Agreement (the “Investor Rights Agreement Amendment”) with the purchasers of the Units and the Requisite Holders under which the Company has provided registration rights with respect to the Common Stock issued in the Offering and the shares of Common Stock issuable upon conversion of the Preferred Shares and exercise of the Warrants.

~~Interest~~On ~~expense for the three month period ended~~ January 313, ~~2011~~2013, ~~decreased~~Lawrence A. byKenyon ~~approximately~~notified ~~$8.4~~the ~~million~~Board ~~compared~~that tohe ~~the~~intends ~~same~~to ~~period~~resign ~~last~~as ~~year. This~~President, ~~decrease~~Chief ~~was~~Executive ~~directly~~Officer, ~~due~~Chief toFinancial ~~the~~Officer ~~beneficial~~and ~~conversion~~Corporate Secretary ~~feature~~ of the ~~convertible~~Company ~~debenture~~as ~~and~~soon ~~warrants~~as wepracticable, ~~issued~~ in ~~October~~order ~~2009~~to ~~and~~pursue ~~the~~other ~~original~~interests. Mr. ~~recognition~~Kenyon ofremained ~~and the change~~ in ~~valuation~~his ofcurrent role ~~the~~until ~~derivative~~March ~~liability~~31, 2013.

~~The~~On ~~net~~February ~~income~~5, ~~for~~2013, Charles Muniz was removed as a director on the ~~three~~Company’s ~~month~~Board ~~period~~of ~~ended~~Directors ~~January~~pursuant ~~31,~~to ~~2011~~an ~~was~~action ~~approximately~~by ~~$11.3~~written ~~million~~consent asof ~~compared~~the tostockholders constituting ~~$3.0~~over ~~million~~a ~~income~~majority ~~for~~of the ~~same~~outstanding ~~period~~capital ~~last~~stock ~~year,~~entitled to vote at an ~~increase~~election of ~~approximately~~directors $8in accordance with Article II, Section 10 and Article III, Section 14 of the By-Laws.3 ~~million~~In addition, Fred Knoll, Patrick Ostronic and Ms. ~~The~~Sulley ~~net~~were ~~income~~elected by ~~was~~the ~~due~~requisite stockholders’ vote to the ~~change~~Company’s Board of Directors to fill the existing vacancies on the Board and to serve in ~~fair~~such ~~value~~positions until the next annual meeting of ~~derivative~~stockholders ~~liability~~or atuntil ~~January~~their 31earlier removal or resignation. Dr. David Sidransky will remain the Chairman of the Board of Directors of the Company. Fred Knoll is the principal of Knoll Capital and an affiliate of one of the principal stockholders, ~~2011~~Europa International, Inc. Patrick Ostronic is affiliated with Unilab LP, another principal stockholder and affiliate of USPI.

~~Six~~On ~~month~~January ~~periods~~25, 2013, the SEC commenced an administrative proceeding against the Company alleging the Company is delinquent in filing its periodic filings with the SEC since the Company has not filed any of its periodic reports since the quarterly report on Form 10-Q filed for the period ended January 31, 2011. The purpose of the hearing is to determine whether it is appropriate for the SEC to suspend for a period of up to 12 months or to permanently revoke the registration of the Company’s common stock pursuant to Section 12 of the Securities Exchange Act of 1934. This action was instituted concurrently with a temporary suspension of trading of the common stock ordered by the SEC from January 25 through February 7, 2013. The Company responded to the SEC motion and ~~2010~~is attempting to become current. On April 25, 2013, the Company filed its two delinquent Form 10-Ks for the years ended July 31, 2012 and 2011 and is in the processes of filing its delinquent Form 10-Qs.

~~We focus most of our productive and financial resources on the development of ONCONASE® and as such we did not have any material sales in the six month periods ended January 31, 2011 and 2010.~~-18-

~~Research~~ITEM ~~and development expense for the six month period ended January 31, 2011 was approximately $0~~2.6 ~~million~~MANAGEMENT’S ~~compared~~DISCUSSION toAND ~~approximately~~ANALYSIS ~~$0.3~~OF ~~million~~FINANCIAL ~~for~~CONDITION ~~the~~AND ~~same~~RESULTS ~~period~~OF in 2010, an increase of approximately $0.3 million. The increase was primarily related to the initiation and thereafter, suspension of the Phase II clinical trial of ONCONASE® for the treatment of non-small cell lung cancer.OPERATIONS

~~General~~The ~~and~~information contained ~~administrative~~in ~~expense~~this ~~for~~Form 10-Q is intended to update the ~~six~~information ~~month~~contained ~~period~~in ~~ended~~our ~~January~~Annual Report on Form 10-K for the year ended July 31, ~~2011~~2010 ~~was~~and ~~approximately~~presume ~~$0.7~~readers ~~million~~have ~~compared~~access to, ~~$0.8~~and ~~million~~will ~~for~~have read, the ~~same~~“Management’s ~~period~~Discussion inand ~~2010,~~Analysis aof Financial ~~decrease~~Condition and Results of ~~$0.1,~~Operations” orand ~~16%~~other information contained in such Form 10-K. ~~This~~ ~~decrease~~The ~~was~~following ~~primarily~~discussion and ~~due~~analysis toalso ~~decreased~~should ~~professional~~be ~~fees~~read together with our financial statements and ~~other~~the ~~general~~notes ~~administrative~~to ~~expenses~~the financial statements included elsewhere in this Form 10-Q.

~~Interest~~The ~~expense~~following discussion ~~for~~contains certain statements that may be deemed “forward-looking statements” within the ~~six~~meaning ~~month~~of ~~period~~the ~~ended~~Private Securities ~~January~~Litigation 31Reform Act of 1995. Such statements appear in a number of places in this Report, ~~2011~~including, ~~decreased~~without bylimitation, “Management’s ~~approximately~~Discussion $9and Analysis of Financial Condition and Results of Operations.6” ~~million~~These ~~compared~~statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the ~~same~~date ~~period~~of ~~last~~this ~~year~~quarterly report. ~~This~~ ~~decrease~~You ~~was~~should ~~directly~~not ~~due~~put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the ~~beneficial~~factors ~~conversion~~described ~~feature~~in ofour ~~the~~Annual ~~convertible~~Report ~~debenture~~on Form ~~and~~10-K ~~warrants~~for wethe ~~issued~~year inended ~~October~~July ~~2009~~31, ~~and~~2010 in the ~~original~~section ~~recognition~~entitled “Risk Factors” for a description of ~~and~~certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the ~~change~~forward-looking statements contained in ~~valuation~~this ofquarterly report on Form 10-Q. The following should also be read in conjunction with the ~~derivative~~unaudited ~~liability~~financial statements and notes thereto that appear elsewhere in this report.

The net income for the six month period ended January 31, 2011 was approximately $2.4 million as compared to the net loss of approximately $6.9 million for the same period last year, an increase of $9.3 million. The increase was due to the change in fair value of derivative liability at January 31, 2011. The cumulative loss from the date of inception, August 24, 1981 to January 31, 2011, amounted to $120.7 million. We have incurred net losses during each year since our inception. Such losses are attributable to the fact that we are still in the development stage and, accordingly, have not derived sufficient revenues from operations to offset our development stage expenses.Overview

~~Off-balance~~We ~~Sheet~~are ~~Arrangements~~a biopharmaceutical company primarily engaged in the discovery and development of a new class of antiviral therapeutic drugs for the treatment of pathological conditions. Our proprietary drug discovery and development program consists of novel therapeutics which are being developed from amphibian ribonucleases (“RNases”).

WeSince our inception in 1981, we have nodevoted ~~off-balance~~the ~~sheet~~vast ~~debt,~~majority noof ~~exposure~~our resources to ~~off-balance~~the ~~sheet~~research ~~arrangements~~and development of ONCONASE®, noas ~~special~~well ~~purpose~~as other ~~entities,~~related ~~nor~~drug ~~activities~~candidates. ~~that~~In ~~include~~recent ~~non-exchange-traded~~years ~~contracts~~we ~~accounted~~have ~~for~~focused atour ~~fair~~resources ~~value~~towards asthe completion of ~~January~~the ~~31,~~clinical ~~2011~~program for ONCONASE® in patients suffering from unresectable malignant mesothelioma (“UMM”).

~~Contractual~~On ~~Obligations~~February 4, 2011, we decided to suspend the Phase II trial of ONCONASE® in combination with carboplatinum regimens in patients suffering from non-small cell lung cancer who have reached maximum progression after receiving two cycles of Alimta plus Carboplatin. Given our limited resources and ~~Commercial~~based ~~Commitments~~upon previously reported positive in vitro results, we shifted our focus to the completion of in vivo studies for Cytomegalovirus (“CMV”) and human papillomavirus (“HPV”).

~~There~~We have ~~been~~incurred nolosses since ~~material~~inception ~~changes~~and ~~with~~we ~~respect~~have tonot received Food and Drug Administration (“FDA”) approval of any of our ~~operating~~drug ~~leases~~candidates. We asexpect ~~disclosed~~to incontinue to incur losses for the ~~“Notes~~foreseeable future as we continue our efforts to receive marketing approval for our drug candidates, which includes the ~~Financial~~sponsorship ~~Statements~~of –human ~~Commitments”~~clinical intrials. Until we are able to consistently generate sufficient revenue through the ~~Company’s~~sale ~~Annual~~of ~~Report~~drug onor ~~Form~~non-drug 10products, we anticipate we will be required to fund the development of our pre-Kclinical compounds ~~for~~and drug product candidates primarily by other means, including, but not limited to, licensing the ~~fiscal~~development ~~year~~or ~~ended~~marketing rights ~~July~~to 31some of our drug candidates to third parties, ~~2010~~collaborating with third parties to develop our drug candidates, or selling Company issued securities.

22-19-

Critical Accounting Policies and Estimates

~~Critical~~The ~~accounting~~preparation of ~~policies~~our ~~are~~financial ~~those~~statements ~~that~~in ~~involve~~conformity ~~subjective~~with oraccounting ~~complex~~principles ~~judgments,~~generally ~~often~~accepted asin athe ~~result~~United States of ~~the~~America ~~need~~("US GAAP") requires management to make estimates~~. The~~, ~~following~~judgments ~~areas~~and ~~all~~assumptions ~~require~~that affect the ~~use~~reported amounts of ~~judgments~~assets and ~~estimates:~~liabilities, disclosure ~~research~~of contingent assets and ~~development~~liabilities ~~expenses,~~at ~~accounting~~the ~~for~~date ~~stock-based~~of ~~compensation,~~the ~~accounting~~financial ~~for~~statements ~~warrants~~and ~~issued~~the ~~with~~reported ~~convertible~~amount ~~debt~~of ~~and~~expenses ~~deferred~~during the ~~income~~reporting ~~taxes~~period. ~~Estimates~~ inOn ~~each~~an ofongoing ~~these~~basis, ~~areas~~we evaluate our estimates which are based on historical experience and ~~various~~on ~~assumptions~~other assumptions that we believe ~~are~~to ~~appropriate. Actual~~be ~~results~~reasonable ~~may~~under ~~differ~~the ~~from~~circumstances. ~~these~~The ~~estimates. Our~~result ~~accounting~~of ~~practices~~these ~~are~~evaluations ~~discussed~~forms inthe ~~more~~basis ~~detail~~for inmaking ~~“Management’s~~judgments about ~~Discussion~~the ~~and~~carrying ~~Analysis~~values of ~~Financial~~assets ~~Condition~~and liabilities and ~~Results~~the reported amount of ~~Operations”~~expenses ~~and~~that ~~Note~~are 1not ofreadily ~~“Notes~~apparent tofrom ~~Financial~~other sources. ~~Statements”~~Actual inresults ~~our~~may ~~Annual~~differ ~~Report~~from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates:

~~Recently~~Results ~~Issued~~of ~~Accounting Standards~~Operations

InFor ~~October 2009, FASB issued amended guidance for separating consideration in multiple-deliverable arrangements. It eliminates~~ the ~~requirement~~Three ~~under~~Months ~~previous~~Ended ~~guidance~~April ~~that all undelivered elements have vendor-specific objective evidence (VSOE) or third-party evidence (TPE) of fair value before recognizing a portion of revenue related to the delivered items~~30, and establishes that revenue be allocated to each element based on its relative selling price, as determined by VSOE, TPE, or the entity’s estimated selling price if neither of the aforementioned is available. Additionally, the amended guidance eliminates the residual method of allocation and expands required disclosures about multiple-element revenue arrangements. It will be effective prospectively for revenue arrangements entered into beginning January 1, 2011, ~~with early adoption permitted. We adopted this guidance~~ and ~~it did not have a material impact on our financial statements.~~2010

In January 2010, the FASB issued a new guidance, “Improving Disclosures about Fair Value Measurements” (ASU 2010-06). This provision amends previous provisions that require reporting entities to make new disclosures about recurring and nonrecurring fair value measurements including the amounts of and reasons for significant transfers into and out of Level 1 and Level 2 fair value measurements and separate disclosure of purchases, sales, issuances, and settlements in the reconciliation of Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2010. The adoption of this guidance did not have a material impact on our results of operations or financial condition.Revenues

InRevenues ~~April~~were ~~2010~~$5,200,000 ~~the~~and ~~FASB~~zero ~~issued a new guidance “Revenue Recognition – Milestone Method”. This provision provides guidance on the criteria that should be met~~ for ~~determining whether~~ the ~~milestone~~three ~~method~~months ofended ~~revenue~~April ~~recognition~~30, is2011 ~~appropriate. A~~and ~~vendor~~2010, can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantiverespectively. ~~The~~ ~~following criteria must be met for a milestone to be considered substantive.~~ The ~~consideration~~increase ~~earned by achieving the milestone should 1) be commensurate with either the level~~ of ~~effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone;~~ $5.2) ~~related~~million ~~solely~~was todue ~~past performance; 3) be reasonable relative~~ to nonrefundable ~~all~~license ~~deliverables~~fees recognized ~~and payment terms~~ in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. Accordingly, an arrangement may contain both substantive and non substantive milestones. This guidance is effective on a prospective basis for milestones achieved in fiscal ~~years, and interim periods within those years, beginning on or after June 15, 2010~~2011. ~~The adoption of this guidance did not have a material impact on our financial statements.~~

23Research and Development Expenses

~~Item~~Research and ~~3. Quantitative~~development expense was $132,145 and ~~Qualitative~~$133,658 ~~Disclosures~~for ~~About~~the ~~Market~~three ~~Risk~~months ended April 30, 2011 and 2010, respectively.

AsGeneral ~~of January 31, 2011, we were exposed to market risks, primarily changes in U.S. interest rates. As of January 31, 2011, we held total cash~~ and ~~cash~~Administrative equivalents of approximately $0.7 million. All cash equivalents have a maturity less than 90 days. Declines in interest rates over time would reduce our interest income from our investments. Based upon our cash and cash equivalents balance as of January 31, 2011, a market interest rate decrease of 1% would have minimal to no impact on the carrying value of our cash and cash equivalents.Expenses

~~Item~~General 4and administrative expenses were $(1,107,137) and $411,069 for the three months ended April 30, 2011 and 2010, respectively. ~~Controls~~ ~~And~~This ~~Procedures~~decrease was primarily due to the reversal of $1,318,126 in compensation expense related to 1,000,000 stock options, tied to performance, issued in April 2008 to the Company’s Founder.

~~(a)~~Other ~~Evaluation~~Income ~~of disclosure controls and procedures.~~(Expense)

~~Under~~Other ~~the~~income ~~supervision~~(expense) was ~~and with the participation of our management~~$3, ~~including our Chief Executive Officer and Chief Financial Officer~~310,855 ~~we evaluated the effectiveness of the design~~ and ~~operation of our “disclosure controls and procedures”~~ $(~~as defined in Rule 13a-15(e~~7,013,727) ~~under~~for the ~~Securities~~three ~~Exchange~~months ~~Act~~ended ofApril ~~1934~~30, as2011 ~~amended~~and ~~(“the Exchange Act”)) as of January 31~~2010, ~~2011, the end of the period covered by this report~~respectively. ~~Based~~ onThis ~~this~~increase ~~evaluation,~~was ~~our~~directly ~~Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective~~ due to ~~ensure that information required to be disclosed by us in~~ the ~~reports~~change ~~that~~of ~~we file or submit under the Exchange Act is recorded~~$10, ~~processed~~332,858 ~~summarized~~from ~~and reported within~~ the ~~time~~mark-to-market ~~periods~~valuation ~~specified in the rules and forms~~ of the ~~Securities~~derivative and Exchange Commission including without limitation, controls and procedures that are designed to ensure that the information required to be disclosed in reports by us that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely discussion regarding required disclosuresliability.

~~(b) Changes~~For inthe ~~internal~~Nine ~~controls.~~Months Ended April 30, 2011 and 2010

There have been no changes in our internal control over financial reporting during the quarter ended January 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting subsequent to the date of the evaluation referred to above.Revenues

~~PART~~Revenues IIwere $5,200,000 and $18,750 for the nine months ended April 30, 2011 and 2010, respectively. ~~OTHER~~The ~~INFORMATION~~increase of $5.2 million was due to a nonrefundable license fees recognized in fiscal 2011.

~~Item~~Research ~~1. Legal~~and ~~Proceedings~~Development Expenses

~~There~~Research and ~~have~~development ~~been~~expense nowas ~~material~~$776,446 ~~changes~~and ~~with~~$416,313 ~~respect~~for to the ~~Company’s~~nine ~~Legal~~months ~~Proceedings~~ended asApril ~~disclosed~~30, in2011 ~~“Item~~and ~~3. Legal~~2010, ~~Proceedings” in the Company’s Annual Report~~respectively.

~~Item~~General ~~1A. Risk~~and ~~Factors~~Administrative Expenses

~~Not~~General ~~Applicable~~and administrative expenses were $(413,999) and $1,238,756 for the nine months ended April 30, 2011 and 2010, respectively. This decrease was primarily due to the reversal of $1,318,126 in compensation expense related to 1,000,000 stock options, tied to performance options, issued in April 2008 to the Company’s Founder.

24Other Income (Expense)

~~Item~~Other 2income (expense) was $7,087,704 and $(12,869,991) for the nine months ended April 30, 2011 and 2010, respectively. ~~Unregistered~~ ~~Sales~~This increase was directly due to the change of ~~Equity~~$20,263,697 ~~Securities~~from ~~and~~the ~~Use~~mark-to-market valuation of ~~Proceeds~~the derivative liability.

~~(a) Recent Sales of Unregistered Securities~~-20-

~~None.~~Liquidity and Capital Resources

~~(b)~~Net ~~Purchases~~cash ofused ~~Equity~~in operating ~~Securities~~activities bywas ~~Issuer~~$244,755 and ~~Affiliated~~$2,554,232 ~~Purchasers~~in the nine months ended April 30, 2011 and 2010, respectively. The decrease was primarily due to an overall decrease in the activities of the Company.

~~None~~Net cash used in investing activities was $0 and $2,748 in the nine months ended April 30, 2011 and 2010, respectively. The difference was the decrease in capital equipment purchases for the nine months ending April 30, 2010.

~~Item~~Net cash provided by financing activities was $495,670 and $3,099,155 in the nine months ended April 30, 2011 and 2010, respectively. ~~Defaults~~ ~~Upon~~The ~~Senior~~difference of ~~Securities~~$2,603,485 in cash flows from financing activities was due to proceeds from the issuance of convertible debt in fiscal 2010.

~~None~~The Company suffered recurring losses from operations and has an accumulated deficit of $111,193,960 at April 30, 2011.

~~Item~~In 4connection with our private financing completed in October 2009, we also entered into an escrow agreement whereby certain investors placed $1,600,000 of the proceeds paid for their Units in an escrow account pursuant to the terms of the Securities Purchase Agreement. ~~Reserved~~ Such amounts were disbursed from the escrow account to satisfy obligations we owed to clinical research organizations, hospitals, doctors and other vendors and service providers associated with the clinical trials for our ONCONASEâ product. The escrow agreement was terminated on April 20, 2011 as all funds had been used.

~~Item~~ In April 2011, the Company completed the sale of 2,500,000 shares of its common stock and the issuance of warrants to purchase 2,500,000 common shares pursuant to an agreement with Unilab LP. The Company received proceeds of $500,000. The warrants have a 5-year term and a purchase price of $0. ~~Other~~50 ~~Information~~per share.

~~None~~On December 14, 2012, the Company completed a private placement of 10 “Units” at $100,000 per Unit, for $1 million pursuant to the Purchase Agreement. Each Unit consisted of (i) 13,846,945 shares of Common Stock, (ii) 1,000 Preferred Shares, each such Preferred Share being initially convertible into 17,718.52 shares of Common Stock, and (iii) Warrants to purchase 12,626,184 shares of Common Stock at $0.003168 per share.

~~Item~~In 6connection with the Offering, and as a condition precedent thereto under the Purchase Agreement, the Requisite Holders of the Company’s outstanding Notes, entered into a Consent and Waiver under which (i) the Notes were amended to provide for the automatic conversion of the outstanding principal and interest of all of the Notes upon the election of the Requisite Holders, (ii) the Requisite Holders elected to convert all outstanding principal and interest under the Notes, of $3,891,838, into shares of Common Stock at $0. ~~Exhibits~~15 per share (the conversion price under the Notes), and (iii) the exercise price of the Series B Warrants held by the holders of the Notes were reduced from $0.25 to $0.01 per share.

~~Exhibits~~The ~~(numbered~~Company has financed its operations since inception primarily through the sale of equity securities and convertible debentures in registered ~~accordance~~offerings and private placements. Additionally, we have raised capital through other debt financings, the sale of our state tax benefit and research products. Because our business does not generate positive cash flow from operating activities, the Company will need to raise additional capital to commercialize our product or fund development efforts relating to additional indications. To the extent additional capital is not available when needed, the Company may be forced to abandon some or all of its development and commercialization efforts, which would have a material adverse effect on the prospects of the business. Based upon the reduced operations, we currently believe that our cash reserves can support our activities through September 2013. We may seek to satisfy future funding requirements through public or private offerings of securities or with ~~Item~~collaborative ~~601~~or other arrangements with corporate partners. Additional financing or strategic transactions may not be available when needed or on terms acceptable to us, if at all. If adequate financing is not available, we may be required to delay, scale back, or eliminate certain of ~~Regulation~~our ~~S-K)~~research and development programs, relinquish rights to certain of our technologies, drugs or products, or license third parties to commercialize products or technologies that we would otherwise seek to develop ourselves.

Exhibit No.	Item Title
3.1		Certificate of Amendment to the Certificate of Incorporation of the Company, dated April 27, 2010 (incorporated by reference as an exhibit to the Company’s Current Report on Form 8-K, filed on April 30, 2010) *
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

-21-

*Inflation ~~Previously~~and ~~filed; incorporated herein by reference.~~Seasonality

25Inflation and seasonality have not been material to us during the past five years.

~~SIGNATURE~~Recent ~~PAGE~~Accounting Pronouncements

~~` Pursuant~~In toJanuary, 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, “Improving Disclosure about Fair Value Measurements.” This ASU added new requirements for disclosures into and out of Levels 1 and 2 fair value measurements and information on purchases, sales, issuances and settlements on a gross basis in the ~~Securities~~reconciliation ~~Exchange~~of ~~Act~~Level 3 fair value measurements. It also clarifies existing fair value disclosures about the level of ~~1934~~disaggregation, inputs and valuation techniques. The guidance in the ~~registrant~~ASU ~~has~~was ~~duly~~effective for ~~caused~~annual and interim reporting periods in fiscal years beginning after November 15, 2010. Adoption of this ~~report~~guidance todid benot ~~signed~~have any effect on ~~its~~our ~~behalf~~financial bystatements ~~the~~or ~~undersigned~~results ~~thereunto~~of ~~duly authorized~~operations.

	TAMIR BIOTECHNOLOGY, INC.
	(Registrant)
March 22, 2011	By:	/s/Charles Muniz
	Name:	Charles Muniz
	Title:	Chief Executive Officer, President and Chief Financial Officer
		(Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)

Refer to the notes to the financial statements in our July 31, 2010 Form 10-K for a complete description of recent accounting standards which we have not yet been required to implement and may be applicable to our operation, as well as those significant accounting standards that have been adopted during the current year.

26Off-Balance Sheet Arrangements

As of April 30, 2011, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

-22-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of April 30, 2011, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report due to the limited size of our staff and budget.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 1, 2010, Robert Love, a former Chief Financial Officer of the Company, filed an amended complaint in Love v. Alfacell Corp. et al., Case No. 3:09-cv-05199-MLC-LHG (the “Amended Complaint”), against the Company and certain of its current and former directors in the U.S. District Court, District of New Jersey, asserting violations of federal and state securities laws, direct and derivative common law claims for fraud and breach of fiduciary duty, a direct claim for negligent misrepresentation and derivative claims for gross negligence and corporate waste in connection with the Company’s Phase IIIb clinical trial for ONCONASE^®. On March 8, 2012, the Company settled for $50,000.

Premier Research Group filed and served a lawsuit against the Company in the Superior Court of New Jersey, Law Division, Essex County, on or about July 26, 2009, seeking the recovery of professional fees that arose from clinical trials purportedly performed in Europe by Premier Research Group as assignee of a contract between Tamir Biotechnology, Inc. and IMFORM GmbH dated October 27, 2005. In August 2010, both parties entered into a Stipulation of Settlement Agreement (“Stipulation”) whereby the Company was to make a payment to Premier of $100,000 which was to be accepted as a payment in full if paid in accordance with the terms of the Stipulation. Pursuant to the terms of the settlement, the Company made four equal installment payments in the aggregate amount of $100,000 in full and final settlement of this matter. The final installment was made in February 2011.

I & G Garden State, LLC (“I&G”) filed and served a complaint against the Company in the Superior Court of New Jersey Law Division, Special Civil Part Landlord-Tenant Section, Somerset County, on or about October 30, 2009, for non-payment of rent and failure to maintain security deposit. The complaint sought to have the Company vacate the property. On November 13, 2009, the Company and I&G agreed that the Company would vacate the property on or before December 31, 2009. In January 2010, the Company vacated the facility as per mutual agreement. In February 2010, I&G withdrew the remaining balance of the Company’s secured irrevocable letter of credit which was placed in March 2007 of $81,000. On February 5, 2010, I&G commenced an action against the Company. The lawsuit seeks unspecified damages for an alleged breach of a lease agreement dated March 14, 2007 between the Company and I & G. On or before November 1, 2010, the Company and I&G entered into a Settlement Agreement and Mutual Release whereas I&G agreed to receive $200,000 for the release in full and complete settlement of all claims made by I&G. In November 2010 and February 2011, the Company paid the $200,000 in accordance with the terms of the settlement agreement.

-23-

On February 23, 2012, the Company settled an action with Pharmatech Oncology, Inc. (“Pharmatech”) whereby the Company agreed to use Pharmatech if the Company conducts any oncology clinical trial using ONCONASE^®. Additionally, the Company agreed to pay Pharmatech $200,000 in consideration of entering into the settlement.

On May 15, 2012, Charles Muniz, the Company’s former President, Chief Executive Officer and Chief Financial Officer and a former director of the Company, filed a complaint against the Company asserting that he had been wrongfully discharged by the Company in violation of federal and state laws. More specifically, the complaint alleged the Company terminated Mr. Muniz’s employment and position as an executive officer of the Company in retaliation of Mr. Muniz’s complaints regarding the Company’s failure to disclose material information in reports filed with the SEC. The complaint seeks unspecified compensatory and punitive damages. The Company believes that the claims are meritless and intends to defend the case vigorously.

On July 26, 2012, certain investors and stockholders of the Company who own more than 7,500,000 shares of the Company’s common stock filed a complaint against the Company and certain current and former executive officers and directors of the Company alleging fraud and breaches of fiduciary duty. The complaint asserts that the Company and the other defendants failed to properly pursue the Company’s application with the FDA for approval of its therapeutics. The complaint alleges that the Company and the other defendants committed securities fraud by failing to disclose material information in reports filed with the SEC in violation of federal and state securities laws. The complaint also alleges that the executive offices and directors of the Company breached their fiduciary duties to the Company’s stockholders by failing to take corrective action and by failing to accurately disclose material information to the Company’s stockholders. In addition to direct claims made by the plaintiffs, the complaint asserts derivative claims for fraud and breaches of fiduciary obligations on behalf of all stockholders of the Company. The complaint seeks over $7,000,000 in compensatory damages and an unspecified amount in punitive damages. The Company believes the claims are baseless and intends to defend the case vigorously.

On January 25, 2013, the SEC commenced an administrative proceeding against the Company alleging the Company is delinquent in filing its periodic filings with the SEC since the Company has not filed any of its periodic reports since the quarterly report on Form 10-Q filed for the period ended January 31, 2011. The purpose of the hearing is to determine whether it is appropriate for the SEC to suspend for a period of up to 12 months or to permanently revoke the registration of the Company’s common stock pursuant to Section 12 of the Securities Exchange Act of 1934. This action was instituted concurrently with a temporary suspension of trading of the common stock ordered by the SEC from January 25 through February 7, 2013. The Company responded to the SEC motion and is attempting to become current. On April 25, 2013, the Company filed its two delinquent Form 10-Ks for the years ended July 31, 2012 and 2011 and is in the processes of filing its delinquent Form 10-Qs.

ITEM 1A. RISK FACTORS

In addition to the other risk factors and information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2010, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K is not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, operating results and/or cash flows.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

-24-

ITEM 5.

OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit		Description
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

-25-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TAMIR BIOTECHNOLOGY, INC.

Date: May 1, 2013	By:	/s/ Jamie Sulley
		Jamie Sulley
		President
		(Principal Executive Officer)

Date: May 1, 2013	By:	/s/ Joanne Barsa
		Joanne Barsa
		Chief Financial Officer and Secretary
		(Principal Financial Officer and Chief Accounting Officer)

-26-

EXHIBIT INDEX

Exhibit		Description
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of the Company’s Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

-27-

Filing Compare · TAMIR BIOTECHNOLOGY, INC.