Successful development of any of our product candidates is highly uncertain. Only a small minority of all research and development programs ultimately result in commercially successful drugs. Even if clinical trials demonstrate safety and effectiveness of any of our product candidates for a specific disease and the necessary regulatory approvals are obtained, the commercial success of any of our product candidates will depend upon their acceptance by patients, the medical community, and third-party payers and on our partners’ ability to successfully manufacture and commercialize our product candidates. If our products are not successfully commercialized, we will not be able to ~~r ecover~~recover the significant investment we have made in developing such products and our business would be severely harmed.

As a result of the recent FDA approval of our application to commence Phase 1 clinical trials, we ~~plan to commence~~have commenced Phase 1 clinical trials for our BP -100-1.01 in 2010. Clinical trials may not demonstrate statistically sufficient effectiveness and safety to obtain the requisite regulatory approvals for this product candidate.

Clinical trials required for our product candidates are expensive and time-consuming, and their outcome is highly uncertain. If any of our drug trials are delayed or yield unfavorable results, we will have to delay or may be unable to obtain regulatory approval for our product candidates. We have ~~recently received FDA approval to start~~commenced dosing patients in our Phase I clinical trials on our BP-100-1.01. We must conduct extensive testing of our product candidates before we can obtain regulatory approval to market and sell them. We need to conduct both preclinical animal testing and human clinical trials. Conducting these trials is a lengthy, time-consuming, and expensive process. These tests and trials may not achieve favorable results for many reasons, including, among others, failure of the product candidate to demonstrate safety or efficacy, the development of serious or life-threatening adverse events (or side effects) caused by or connected with exposure to the product candidate, difficulty in enrolling and maintaining subjects in the clinical trial, lack of sufficient supplies of the product candidate or comparator drug, and the failure of clinical investigators, trial monitors, contractors, consultants, or trial subjects to comply with the trial plan or protocol. A clinical trial may fail because it did not include a sufficient number of patients to detect the endpoint being measured or reach statistical significance. A clinical trial may also fail because the dose(s) of the investigational drug included in the trial were either too low or too high to determine the optimal effect of the investigational drug in the disease setting. Many of clinical trials are conducted under the oversight of ~~Indep endent~~Independent Data Monitoring Committees (or IDMCs). These independent oversight bodies are made up of external experts who review the progress of ongoing clinical trials, including available safety and efficacy data, and make recommendations concerning a trial’s continuation, modification, or termination based on interim, unblinded data. Any of ongoing clinical trials may be discontinued or amended in response to recommendations made by responsible IDMCs based on their review of such interim trial results.

We will need to reevaluate any drug candidate that does not test favorably and either conduct new trials, which are expensive and time consuming, or abandon the drug development program. Even if we obtain positive results from preclinical or clinical trials, we may not achieve the same success in future trials. Many companies in the biopharmaceutical industry have suffered significant setbacks in clinical trials, even after promising results have been obtained in earlier trials. The failure of clinical trials to demonstrate safety and effectiveness for the desired indication(s) could harm the development of our product candidate(s), and our business, financial condition, and results of operations may be materially harmed.

We may be unable to formulate or manufacture our product candidates in a way that is suitable for clinical or commercial use. Changes in product formulations and manufacturing processes may be required as product candidates’ progress in clinical development and are ultimately commercialized. If we are unable to develop suitable product formulations or manufacturing processes to support large scale clinical testing of our product candidates, we may be unable to supply necessary materials for our clinical trials, which would delay the development of our product candidates. Similarly, if we are unable to supply sufficient quantities of our product or develop product formulations suitable for ~~c ommercial~~commercial use, we will not be able to successfully commercialize our product candidates.

Reliance on collaboration agreements. Our business strategy depends upon our ability to enter into collaborative relationships for the development and commercialization of products based on licensed compounds. We will face significant competition in seeking necessary and appropriate collaborators. Moreover, these arrangements are complex to negotiate and time-consuming to document. We may not be successful in our efforts to establish or maintain our existing collaborative relationships, if any, or other alternative arrangements on commercially reasonable terms. We have not entered into any collaborative agreements and there can be no assurance that we will ever enter into such ~~agreemen ts.~~agreements. If we are unable to enter into collaborative agreements, our business model must change and we will be required to raise even greater capital to fund the costs of services that we anticipate having provided by collaborators. This will make an investment in Bio-Path an even greater risk to investors.

If we do enter into collaborative agreements, of which there can be no assurance, the success of collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Our collaborators will have significant discretion in determining the efforts and resources that they will apply to these collaborations. The risks that we face in connection with these collaborations include, but are not limited to, the following:

disputes may arise in the future with respect to the ownership of rights to technology developed with collaborators;

disagreements with collaborators could delay or terminate the research, development or commercialization of products, or result in litigation or arbitration;

we may have difficulty enforcing the contracts if one of our collaborators fails to perform;

our collaborators may terminate their collaborations with us, which could make it difficult for us to attract new collaborators or adversely affect the perception of us in the business or financial communities;

collaborators will have considerable discretion in electing whether to pursue the development of any additional drugs and may pursue technologies or products either on their own or in collaboration with our competitors that are similar to or competitive with our technologies or products that are the subject of the collaboration with Bio-Path; and

our collaborators may change the focus of their development and commercialization efforts. Pharmaceutical and biotechnology companies historically have re-evaluated their priorities following mergers and consolidations, which have been common in recent years in these industries. The ability of our products to reach their potential could be limited if our collaborators decrease or fail to increase spending relating to such products.

Given these risks, it is possible that any collaborative arrangements into which we enter may not be successful. The failure of any of our collaborative relationships could delay drug development or impair commercialization of our products.

Reliance on third parties for manufacturing. We have no manufacturing experience and no commercial scale manufacturing capabilities and we do not expect to manufacture any products in the foreseeable future. In order to continue to develop products, apply for regulatory approvals and ultimately commercialize products, we will need to develop, contract for, or otherwise arrange for the necessary manufacturing capabilities. However, “out-license” pharmaceutical partners will likely be responsible for manufacturing of those drug requirements.

We intend to rely upon third parties to produce material for preclinical and clinical testing purposes. We expect that our out-license pharmaceutical partners, to the extent we have such partners, will produce materials that may be required for the commercial production of our products.

We have entered into a Supply Agreement with Althea Technologies, Inc. for the manufacture of our drug requirements for our drug BP-100-1.01. Althea is a manufacturer that operates under the FDA’s current good manufacturing practices (“cGMP”) regulations and is capable of manufacturing our products in the foreseeable future. If our pharmaceutical company partners are unable to arrange for third party manufacturing of our products on a timely basis, Althea could potentially manufacture their requirements.

Reliance on third party manufacturers will entail risks to which we would not be subject if we manufactured our own products, including, but not limited to:

reliance on the third party for regulatory compliance and quality assurance;

the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control;

the possibility of termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for Bio-Path;

the potential that third party manufacturers will develop know-how owned by such third party in connection with the production of our products that is necessary for the manufacture of our products; and

reliance upon third party manufacturers to assist us in preventing inadvertent disclosure or theft of Bio-Path’s proprietary knowledge.

Reliance on key members of scientific and management staff. Our success depends on the availability and contributions of members of our current and future scientific team and our current and future senior management teams and other key personnel that we currently have or which we may develop in the future. The loss of services of any of these persons could delay or reduce our product development and commercialization efforts. Furthermore, recruiting and retaining qualified scientific personnel to perform future research and development work will be critical to our success. The loss of members of our management team, key clinical advisors or scientific personnel, or our inability to attract or retain ~~ot her~~other qualified personnel or advisors, could significantly weaken our management, harm our ability to compete effectively and harm our business.

Need for intellectual property protection. We have entered into three license agreements with M. D. Anderson. The patents underlying the licensed intellectual property and positions, and those of other biopharmaceutical companies, are generally uncertain and involve complex legal, scientific and factual questions.

Our ability to develop and commercialize drugs depends in significant part on our ability to:

obtain and/or develop broad, protectable intellectual property;

obtain additional licenses to the proprietary rights of others on commercially reasonable terms;

operate without infringing upon the proprietary rights of others;

prevent others from infringing on our proprietary rights; and

protect trade secrets.

We do not know whether any of those patent applications which we may have licensed will result in the issuance of any patents. Patents that we may acquire and those that might be issued in the future, may be challenged, invalidated or circumvented, and the rights granted thereunder may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies or duplicate any technology we develop. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our products can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, , thus reducing any advantage of the patent.

Because patent applications in the United States and many foreign jurisdictions are typically not published until at least 12 months after filing, or in some cases not at all, and because publications of discoveries in the scientific literature often lag behind actual discoveries, neither Bio-Path nor our licensors can be certain that either Bio-Path or our licensors were the first to make the inventions claimed in issued patents or pending patent applications, or that Bio-Path was the first to file for protection of the inventions set forth in these patent applications.

Reliance on third party patents. We may not have rights under some patents or patent applications related to products we may develop in the future. Third parties may own or control these patents and patent applications in the United States and abroad. Therefore, in some cases, to develop, manufacture, sell or import some of our future products, Bio-Path or our collaborators may choose to seek, or be required to seek, licenses under third party patents issued in the United States and abroad or under patents that might be issued from United States and foreign patent applications. In instances in which Bio-Path must obtain a license for third party patents, it will be required to pay license fees or ~~royal ties~~royalties or both to the licensor. If licenses are not available to us on acceptable terms, we or our collaborators may not be able to develop, manufacture, sell or import these products.

Exposure to patent litigation. There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical and biotechnology industry. We may become a party to various types of patent litigation or other proceedings regarding intellectual property rights from time to time even under circumstances where we are not using and do not intend to use any of the intellectual property involved in the proceedings.

The cost of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the cost of such litigation or proceedings more effectively than we will be able to because our competitors may have substantially greater financial resources. If any patent litigation or other proceeding is resolved against us, we or our collaborators may be enjoined from developing, manufacturing, selling or importing our drugs without a license from the other party and we may be held liable for significant damages. We may not be able to obtain any required license(s) on commercially acceptable terms or at all.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

The Company does have patent product litigation liability in place. However: it may not be sufficient to cover litigations circumstances.

Competition. The pharmaceutical and biotechnology industry is highly competitive and characterized by rapid and significant technological change. We will face intense competition from organizations such as pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies. Some of these organizations are pursuing products based on technologies similar to our future technologies. Other of these organizations have developed and are marketing products, or are pursuing other technological approaches designed to produce products that are competitive with our future product candidates in the therapeutic ~~eff ect~~effect these competitive products have on diseases targeted by our product candidates. Our competitors may discover, develop or commercialize products or other novel technologies that are more effective, safer or less costly than any that we may develop. Our competitors may also obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our products.

Many of our competitors are substantially larger than we are and have greater capital resources, research and development staffs and facilities than we have. In addition, many of our competitors are more experienced in drug discovery, development and commercialization, obtaining regulatory approvals, and drug manufacturing and marketing.

We anticipate that the competition with our products and technologies will be based on a number of factors including product efficacy, safety, availability, and price. The timing of market introduction of our future products and competitive products will also affect competition among products. We expect the relative speed with which we can develop products, complete the initial Phase I and IIA clinical trials, establish a strategic partner and supply appropriate quantities of the products for late stage trials to be important competitive factors. Our competitive position will also depend upon our ability to attract and retain qualified personnel, to obtain patent protection or otherwise develop proprietary products or processes and to secure sufficient capital resources for the ~~peri od~~period between technological conception and commercial sales or out-license to a pharmaceutical partner.

Market reception. The commercial success of any of our future products for which we may obtain marketing approval from the FDA or other regulatory authorities will depend upon their acceptance by the medical community and third party payors as clinically useful, cost-effective and safe. Many of the products that we will develop will be based upon technologies or therapeutic approaches that are relatively new and unproven. As a result, it may be more difficult for us to achieve regulatory approval or market acceptance of our products. Our efforts to educate the medical community on these potentially unique approaches may require greater resources than would be typically required for products based on ~~co nventional~~conventional technologies or therapeutic approaches. The safety, efficacy, convenience and cost-effectiveness of our future products as compared to competitive products will also affect market acceptance.

Changes in Bio-Path relationships with M. D. Anderson. Our license agreements with M. D. Anderson provide M. D. Anderson the right to terminate the agreements upon written notice to us if we do not meet all of our requirements under the license agreements which require us to file an Investigational New Drug Application with the FDA or have a commercial sale of a licensed product within an agreed upon period of time. If either of the licenses or any other agreements we enter into with M. D. Anderson is terminated for any reason, our business will be adversely and perhaps materially adversely affected, and our business may fail. In addition, our relationship with M. D. Anderson is not exclusive to us. It is possible that M. D. Anderson could enter into an exclusive relationship with one of our future competitors. If this were to occur it could adversely affect our competitive position and depending on the terms of any such agreement, could make it difficult for us to succeed.

No sales, marketing and distribution capabilities. We currently have no sales, marketing, or distribution capabilities and do not intend to develop such capabilities in the foreseeable future. If we are unable to establish sales, marketing, or distribution capabilities either by developing our own sales, marketing and distribution organization or by entering into agreements with others, we may be unable to successfully sell any products that we are able to begin to commercialize. If we, and our strategic partners, are unable to effectively sell our products, our ability to generate revenues will be harmed. We may not be able to hire, in a timely manner, the qualified sales and marketing personnel for our needs, ~~i f~~if at all. In addition, we may not be able to enter into any marketing or distribution agreements on acceptable terms, if at all. If we cannot establish sales, marketing and distribution capabilities as we intend, either by developing our own capabilities or entering into agreements with third parties, sales of future products, if any, will be harmed.

Exposure to product liability claims or recall. Our business will expose us to potential product liability risks inherent in the clinical testing and manufacturing and marketing of pharmaceutical products, and we may not be able to avoid significant product liability exposure. A product liability claim or recall could be detrimental to our business. In addition, we do not currently have any product liability or clinical trial insurance, and we may not be able to obtain or maintain such insurance on acceptable terms, or we may not be able to obtain any insurance to provide adequate coverage against potential liabilities. Our inability to obtain ~~suf ficient~~sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or limit the commercialization of any products that we develop.

Rapid technology change and obsolescence. New products and technological developments in the healthcare field may adversely affect our ability to complete the necessary regulatory requirements and introduce the proposed products in the market. The healthcare field, which is the market for our products, is characterized by rapid technological change, new and improved product introductions, changes in regulatory requirements, and evolving industry standards. Our future success will depend to a substantial extent on our ability to identify new market trends on a timely basis and develop, introduce and support proposed products on a successful and timely basis. If we fail to develop and deploy our proposed products on a successful and timely basis, we may not be competitive.

Risks Relating to Governmental Approvals

Extensive regulatory requirements. The testing, manufacturing, labeling, advertising, promotion, exporting, and marketing of our products are subject to extensive regulation by governmental authorities in Europe, the United States and elsewhere throughout the world.

To date, we have not submitted a marketing application for any product candidate to the FDA or any foreign regulatory agency, and none of our product candidates have been approved for commercialization in any country. Prior to commercialization, each product candidate would be subject to an extensive and lengthy governmental regulatory approval process in the United States and in other countries. We may not be able to obtain regulatory approval for any product candidate we develop or, even if approval is obtained, the labeling for such products may place restrictions on their use that could materially impact the marketability and profitability of the product subject to such restrictions. Any regulatory approval of a product may also contain requirements for costly post-marketing testing and surveillance to ~~monito r~~monitor the safety or efficacy of the product. Any product for which we or our pharmaceutical company out-license partner obtain marketing approval, along with the facilities at which the product is manufactured, any post-approval clinical data and any advertising and promotional activities for the product will be subject to continual review and periodic inspections by the FDA and other regulatory agencies.

We have limited experience in designing, conducting, and managing the clinical testing necessary to obtain such regulatory approval. Satisfaction of these regulatory requirements, which includes satisfying the FDA and foreign regulatory authorities that the product is both safe and effective for its intended therapeutic uses, typically takes several years depending upon the type, complexity and novelty of the product and requires the expenditure of substantial resources. In addition to our internal resources, we will depend on regulatory consultants and our proposed Scientific Advisory Board for assistance in designing our preclinical studies and clinical trials and drafting documents for submission to the FDA. If we are not able to obtain regulatory consultants on ~~commerciall y~~commercially reasonable terms, we may not be able to conduct or complete clinical trials or commercialize our product candidates. We intend to establish relationships with multiple regulatory consultants for our existing clinical trials, although there is no guarantee that the consultants will be available for future clinical trials on terms acceptable to us.

In addition, submission of an application for marketing approval to the relevant regulatory agency following completion of clinical trials may not result in the regulatory agency approving the application if applicable regulatory criteria are not satisfied, and may result in the regulatory agency requiring additional testing or information.

Both before and after approval is obtained, violations of regulatory requirements may result in:

the regulatory agency’s delay in approving, or refusal to approve, an application for approval of a product;

restrictions on such products or the manufacturing of such products;

withdrawal of the products from the market;

warning letters;

voluntary or mandatory recall;

fines;

suspension or withdrawal of regulatory approvals;

product seizure;

refusal to permit the import or export of our products;

injunctions or the imposition of civil penalties; and

criminal penalties.

Clinical trials. In order to obtain regulatory approvals for the commercial sale of our products, we will be required to complete extensive clinical trials in humans to demonstrate the safety and efficacy of our drug candidates. We have recently ~~received FDA approval to start~~commenced dosing patients in our Phase I clinical trials for ~~our~~ BP-100-1.01. We may not be able to obtain authority from the FDA or other equivalent foreign regulatory agencies to move on to Phase II or Phase III clinical trials or commence and complete any other clinical trials for any other products.

The results from preclinical testing of a drug candidate that is under development may not be predictive of results that will be obtained in human clinical trials. In addition, the results of early human clinical trials may not be predictive of results that will be obtained in larger scale, advanced stage clinical trials. A failure of one or more of our clinical trials can occur at any stage of testing. Further, there is to date no data on the long-term clinical safety of our lead compounds under conditions of prolonged use in humans, nor on any long-term consequences subsequent to human use. We may experience numerous unforeseen events during, or as a result of, preclinical testing and the clinical trial process that could delay or prevent its ability to receive regulatory approval or commercialize our products, including:

regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;

our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect may not be promising;

we might have to suspend or terminate our clinical trials if the participating patients are being exposed to unacceptable health risks;

regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;

the cost of our clinical trials may be greater than we currently anticipate;

the timing of our clinical trials may be longer than we currently anticipate; and

the effects of our products may not be the desired effects or may include undesirable side effects or the products may have other unexpected characteristics.

The rate of completion of clinical trials is dependent in part upon the rate of enrollment of patients. Patient accrual is a function of many factors, including:

the size of the patient population;

the proximity of patients to clinical sites;

the eligibility criteria for the study;

the nature of the study;

the existence of competitive clinical trials; and

the availability of alternative treatments.

We may not be able to successfully complete any clinical trial of a potential product within any specified time period. In some cases, we may not be able to complete the trial at all. Moreover, clinical trials may not show our potential products to be both safe and efficacious. Thus, the FDA and other regulatory authorities may not approve any of our potential products for any indication.

Our clinical development costs will increase if we experience delays in our clinical trials. We do not know whether planned clinical trials will begin as planned, will need to be restructured or will be completed on schedule, if at all. Significant clinical trial delays could also allow our competitors to bring products to market before we do and impair our ability to commercialize our products.

Pricing and reimbursement. If our future strategic partners succeed in bringing our product candidates to the market, they may not be considered cost-effective, and coverage and adequate payments may not be available or may not be sufficient to allow us to sell our products on a competitive basis. In both the United States and elsewhere, sales of medical products and therapeutics are dependent, in part, on the availability of reimbursement from third party payors, such as health maintenance organizations and other private insurance plans, and governmental programs such as Medicare.

Third party payors are increasingly challenging the prices charged for pharmaceutical products and medical devices. Our business will be affected by the efforts of government and third party payors to contain or reduce the cost of health care through various means. In the United States, there have been and will continue to be a number of federal and state proposals to implement government controls on pricing. Similar government pricing controls exist in varying degrees in other countries. In addition, the emphasis on managed care in the United States has increased, and will continue to increase the pressure on the pricing of pharmaceutical products and medical devices. We cannot predict whether any legislative or regulatory proposals will be adopted or the effect these proposals or managed care efforts may have on our business.

Changes in laws and regulations affecting the healthcare industry could adversely affect our business. All aspects of our business, including research and development, manufacturing, marketing, pricing, sales, litigation, and intellectual property rights, are subject to extensive legislation and regulation. Changes in applicable federal and state laws and agency regulations could have a material adverse effect on our business. These include:

changes in the FDA and foreign regulatory processes for new therapeutics that may delay or prevent the approval of any of our current or future product candidates;

new laws, regulations, or judicial decisions related to healthcare availability or the payment for healthcare products and services, including prescription drugs, that would make it more difficult for us to market and sell products once they are approved by the FDA or foreign regulatory agencies;

changes in FDA and foreign regulations that may require additional safety monitoring prior to or after the introduction of new products to market, which could materially increase our costs of doing business; and

changes in FDA and foreign current Good Manufacturing Practice, or cGMPs, that make it more difficult for us to manufacture our marketed product and clinical candidates in accordance with cGMPs.

Regulatory and legal uncertainties could result in significant costs or otherwise harm our business. In order to manufacture and sell our products, we must comply with extensive international and domestic regulations. In order to sell its products in the United States, approval from the FDA is required. The FDA approval process is expensive and time-consuming. We cannot predict whether our products will be approved by the FDA. Even if they are approved, we cannot predict the time frame for approval. Foreign regulatory requirements differ from jurisdiction to jurisdiction and may, in some cases, be more stringent or difficult to obtain than FDA approval. As with the FDA, we cannot ~~predi ct~~predict if or when we may obtain these regulatory approvals. If we cannot demonstrate that our products can be used safely and successfully in a broad segment of the patient population on a long-term basis, our products would likely be denied approval by the FDA and the regulatory agencies of foreign governments.

Our Product candidates are based on new technology and, consequently, are inherently risky. Concerns about the safety and efficacy of our products could limit our future success. We are subject to the risks of failure inherent in the development of product candidates based on new technologies. These risks include the possibility that the products we create will not be effective, that our product candidates will be unsafe or otherwise fail to receive the necessary regulatory approvals or that our product candidates will be hard to manufacture on a large scale or will be uneconomical to market.

Many pharmaceutical products cause multiple potential complications and side effects, not all of which can be predicted with accuracy and many of which may vary from patient to patient. Long term follow-up data may reveal additional complications associated with our products. The responses of potential physicians and others to information about complications could materially affect the market acceptance of our future products, which in turn would materially harm our business.

Unsuccessful or delayed regulatory approvals required to exploit the commercial potential of our future products could increase our future development costs or impair our future sales. No Bio-Path technologies have been approved by the FDA for sale in the United States or in foreign countries. To exploit the commercial potential of our technologies, we are conducting and planning to conduct additional pre-clinical studies and clinical trials. This process is expensive and can require a significant amount of time. Failure can occur at any stage of testing, even if the results are favorable. Failure to adequately demonstrate safety and efficacy in clinical trials would prevent regulatory approval and restrict our ~~a bility~~ability to commercialize our technologies. Any such failure may severely harm our business. In addition, any approvals obtained may not cover all of the clinical indications for which approval is sought, or may contain significant limitations in the form of narrow indications, warnings, precautions or contraindications with respect to conditions of use, or in the form of onerous risk management plans, restrictions on distribution, or post-approval study requirements.

State pharmaceutical marketing compliance and reporting requirements may expose us to regulatory and legal action by state governments or other government authorities. In recent years, several states ~~including California, Vermont, Maine, Minnesota, New Mexico and West Virginia~~ have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs and file periodic reports on sales, marketing, pricing and other activities. Similar legislation is being considered in other states. Many of these requirements are new and uncertain, and available guidance is limited. Unless we are in full compliance with these laws, we could face enforcement actions and fines and other penalties and ~~cou ld~~could receive adverse publicity, all of which could harm our business.

We may be subject to new federal and state legislation to submit information on our open and completed clinical trials to public registries and databases. In 1997, a public registry of open clinical trials involving drugs intended to treat serious or life-threatening diseases or conditions was established under the Food and Drug Administration Modernization Act, or the FDMA, in order to promote public awareness of and access to these clinical trials. Under the FDMA, pharmaceutical manufacturers and other trial sponsors are required to post the general purpose of these trials, as well as the eligibility criteria, location and contact information of the trials. Since the establishment of this registry, ~~t here~~there has been significant public debate focused on broadening the types of trials included in this or other registries, as well as providing for public access to clinical trial results. A voluntary coalition of medical journal editors has adopted a resolution to publish results only from those trials that have been registered with a no-cost, publicly accessible database, such as www.clinicaltrials.gov. Federal legislation was introduced in the fall of 2004 to expand www.clinicaltrials.gov and to require the inclusion of study results in this registry. The Pharmaceutical Research and Manufacturers of America has also issued voluntary principles for its members to make results from certain clinical studies publicly available and has established a website for this purpose. Other groups have adopted or are considering similar proposals for clinical trial registration and the posting of clinical trial results. Failure to comply with any clinical trial posting requirements could expose us to negative publicity, ~~fi nes~~fines and other penalties, all of which could materially harm our business.

We face uncertainty related to pricing and reimbursement and health care reform. In both domestic and foreign markets, sales of our future products will depend in part on the availability of reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations and other health care-related organizations. Reimbursement by such payors is presently undergoing reform and there is significant uncertainty at this time as to how this will affect sales of certain pharmaceutical products.

Medicare, Medicaid and other governmental healthcare programs govern drug coverage and reimbursement levels in the United States. Federal law requires all pharmaceutical manufacturers to rebate a percentage of their revenue arising from Medicaid-reimbursed drug sales to individual states. Generic drug manufacturers’ agreements with federal and state governments provide that the manufacturer will remit to each state Medicaid agency, on a quarterly basis, 11% of the average manufacturer price for generic products marketed and sold under abbreviated new drug applications covered by the state’s Medicaid program. For proprietary products, which are marketed and sold under new drug applications, manufacturers are required to rebate the greater of (a) 15.1% of the average manufacturer price or (b) the difference between the average manufacturer price and the lowest manufacturer price for products sold during a specified period.

Both the federal and state governments in the United States and foreign governments continue to propose and pass new legislation, rules and regulations designed to contain or reduce the cost of health care. Existing regulations that affect the price of pharmaceutical and other medical products may also change before any products are approved for marketing. Cost control initiatives could decrease the price that we receive for any product developed in the future. In addition, third-party payors are increasingly challenging the price and cost-effectiveness of medical products and services and litigation has been filed against a number of pharmaceutical companies in relation to these issues. Additionally, some uncertainty may exist as to the reimbursement status of newly approved injectable pharmaceutical products. Our products, if any, ~~m ay~~may not be considered cost effective or adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an adequate return on our investment.

Other companies may claim that we infringe their intellectual property or proprietary rights, which could cause us to incur significant expenses or prevent us from selling products. Our success will depend in part on our ability to operate without infringing the patents and proprietary rights of third parties. The manufacture, use and sale of new products have been subject to substantial patent rights litigation in the pharmaceutical industry. These lawsuits generally relate to the validity and infringement of patents or proprietary rights of third parties. Infringement litigation is prevalent with respect to generic versions of products for which the patent covering the brand name product is expiring, ~~particular ly~~particularly since many companies which market generic products focus their development efforts on products with expiring patents. Other pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of our products or its licensors’ products, product candidates or other technologies.

Future or existing patents issued to third parties may contain patent claims that conflict with our future products. We expect to be subject to infringement claims from time to time in the ordinary course of business, and third parties could assert infringement claims against us in the future with respect to products that we may develop or license. Litigation or interference proceedings could force us to:

stop or delay selling, manufacturing or using products that incorporate or are made using the challenged intellectual property;

pay damages; or

enter into licensing or royalty agreements that may not be available on acceptable terms, if at all.

Any litigation or interference proceedings, regardless of their outcome, would likely delay the regulatory approval process, be costly and require significant time and attention of key management and technical personnel.

Any inability to protect intellectual property rights in the United States and foreign countries could limit our ability to manufacture or sell products. We will rely on trade secrets, unpatented proprietary know-how, and continuing technological innovation and, in some cases, patent protection to preserve a competitive position. Our patents and licensed patent rights may be challenged, invalidated, infringed or circumvented, and the rights granted in those patents may not provide proprietary protection or competitive advantages to us. We and our licensors may not be able to develop patentable products. Even if patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect the technology owned by or licensed to us. Third party patents could reduce the coverage of the patent’s license, or that may be licensed to or owned by us.

If patents containing competitive or conflicting claims are issued to third parties, we may be prevented from commercializing the products covered by such patents, or may be required to obtain or develop alternate technology. In addition, other parties may duplicate, design around or independently develop similar or alternative technologies.

We may not be able to prevent third parties from infringing or using our intellectual property, and the parties from whom we may license intellectual property may not be able to prevent third parties from infringing or using the licensed intellectual property. We generally will attempt to control and limit access to, and the distribution of, our product documentation and other proprietary information. Despite efforts to protect this proprietary information, however, unauthorized parties may obtain and use information that we may regard as proprietary. Other parties may independently develop similar know-how or may even obtain access to these technologies.

The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in these foreign countries.

The U.S. Patent and Trademark Office and the courts have not established a consistent policy regarding the breadth of claims allowed in pharmaceutical patents. The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation. On the other hand, the allowance of narrower claims may limit the value of our proprietary rights.

We may be required to defend lawsuits or pay damages for product liability claims. Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products. We may face substantial product liability exposure in human clinical trials and for products that sell after regulatory approval. Product liability claims, regardless of their merits, could exceed policy limits, divert management’s attention, and adversely affect our reputation and the demand for our products.

Other Corporate Risks

Our articles of incorporation grant our board of directors the power to designate and issue additional shares of common and/or preferred stock. Our authorized capital consists of 200,000,000 shares of common stock and 10,000,000 shares of preferred stock. Our preferred stock may be designated into series pursuant to authority granted by our articles of incorporation, and on approval from our board of directors. The board of directors, without any action by our shareholders, may designate and issue shares in such classes or series as the board of directors deems appropriate and establish the rights, preferences and privileges of such shares, including dividends, liquidation and ~~v oting~~voting rights. The rights of holders of other classes or series of stock that may be issued could be superior to the rights of holders of our common shares. The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to shares of our common stock.

Furthermore, any issuances of additional stock (common or preferred) will dilute the percentage of ownership interest of then-current holders of our capital stock and may dilute the book value per share of our common stock.

We do not intend to pay dividends on our common stock for the foreseeable future. We do not anticipate that we will have any revenues for the foreseeable future and accordingly, we do not anticipate that we will pay any dividends for the foreseeable future. Accordingly, any return on an investment in our Company will be realized, if at all, only when you sell shares of our common stock.

Our common stock trades only in an illiquid trading market. Trading of our common stock is conducted on the “OTC Bulletin Board”. This could have an adverse effect on the liquidity of our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts’ and the media’s coverage of Bio-Path and our common stock. This may result in lower prices for our common stock than might otherwise be obtained and could also result in a larger spread between the bid and asked prices for our common stock.

If the trading price of our common stock continues to fluctuate in a wide range, our shareholders will suffer considerable uncertainty with respect to an investment in our common stock. The trading price of our common stock has been volatile and may continue to be volatile in the future. Factors such as announcements of fluctuations in our or our competitors’ operating results or clinical or scientific results, fluctuations in the trading prices or business prospects of our competitors and collaborators, changes in our prospects, and market conditions for biopharmaceutical stocks in general could have a significant impact on the future trading prices of our common stock and our convertible senior notes. In particular, the trading price of the common stock of many biopharmaceutical companies, including ours, has experienced extreme price and volume fluctuations, which have at times been unrelated to the operating performance of the companies whose stocks were affected. This is due to several factors, including general market conditions, the announcement of the results of our clinical trials or product development and the results of our efforts to obtain regulators approval of our products. ~~In particular, between February 15, 2008 and December 31, 2009, the closing sales price of our common stock fluctuated from a low of $0.27 per share to a high of $6.00 per share.~~ While we cannot predict our future performance, if our stock price continues to fluctuate in a wide range, an investment in our common stock may result in considerable uncertainty for an investor.

Penny stock. Our common stock is considered to be a ~~“penny stock” if it meets one or more of the definitions in Rules 15g-2 through 15g-6 promulgated~~"penny stock." The SEC has adopted rules under Section 15(g) of the Securities Exchange Act of 1934, as ~~amended. These include, but are not limited~~amended, which generally defines "penny stock" to be any equity security that meets one or more of the following: (i) ~~the stock trades at~~has a market price less than $5.00 per ~~share;~~share, or an exercise price of less than $5.00 per share, subject to certain exceptions; (ii) it is NOT traded on a ~~“recognized”~~"recognized" national exchange; (iii) it is NOT quoted on the NASDAQ Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company with net tangible assets less than $2.0 million, if in business more than a continuous three years, or with average revenues of less than $6.0 million ~~f or~~for the past three years. ~~The principal result or effect of being designated a “penny stock” is that~~Our securities ~~broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis.~~

~~Additionally, Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated there under~~are covered by the ~~SEC~~penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and institutional accredited investors. The penny stock rules require ~~broker-dealers dealing in penny stocks~~a broker-dealer, prior to ~~provide potential investors with~~ a ~~document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any~~ transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the ~~investor’s~~penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.

The bid and offer quotations, and the broker- dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock. Potential investors in our common stock are urged to obtain and read such disclosure documents and information carefully before purchasing any ~~Units~~securities that are deemed to be ~~“penny~~"penny stock.~~” Moreover, Rule 15g-9 requires broker-dealers~~"

In addition to the "penny stock" rules promulgated by the SEC, the Financial Industry Regulatory Authority, or FINRA, has adopted rules that require that in ~~penny stocks~~recommending an investment to ~~approve~~a customer, a broker-dealer must have reasonable grounds for believing that the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment ~~experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are~~is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the ~~investor~~customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that ~~the investor has sufficient knowledge and experience as to~~there is a high probability that speculative low priced securities will not be reasonably capable of evaluating the risks of penny stock transactions; & #160;(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with thesesuitable for at least some customers. The FINRA requirements ~~may~~ make it more difficult for ~~holders of~~broker-dealers to recommend that their customers buy our common stock, which may limit your ability to ~~resell their Units to third parties or to otherwise dispose of them in the market or otherwise.~~buy and sell our stock.

Limitation on director liability. As permitted by Utah law, our Articles of Incorporation limit the liability of directors to the Company or its shareholders for monetary damages for breach of a director’s fiduciary duty except for liability in certain instances. As a result of such Articles of Incorporation and Utah law, our shareholders may have limited rights to recover against directors for breach of fiduciary duty.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We currently do not have any significant facilities. We lease ~~two~~a small ~~offices~~office in each of Ogden, Utah and Houston, Texas. ~~The offices~~Offices will be expanded as additional employees join Bio-Path. Due to the anticipated use of the PDC or another laboratory company for pre-clinical development of our sponsored drug candidates, Bio-Path does not foresee at this time the need to lease laboratory space.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any legal proceedings.

ITEM 4. ~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~(REMOVED AND RESERVED)

~~No matters were submitted to our shareholders for a vote during the last quarter of the year ended December 31, 2009.~~

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

Our common stock is quoted on the OTCBB under the symbol “BPTH”. There has ~~only~~ been limited trading in our common stock. The prices reported below reflect inter-dealer prices and are without adjustments for retail markups, markdowns or commissions, and may not necessarily represent actual transactions.

High Bid Low Bid
Fiscal Year Ended December 31, 2008

First Fiscal Quarter $  .90 $  .61
Second Fiscal Quarter $ .90 $  .35
Third Fiscal Quarter $  .50 $  .35
Fourth Fiscal Quarter $1.65 $1.40

High Bid Low Bid
Fiscal Year Ended December 31, 2009

First Fiscal Quarter $  .90 $  .61
Second Fiscal Quarter $  .90 $  .35
Third Fiscal Quarter $  .87 $  .50
Fourth Fiscal Quarter $  .87 $  .50

Fiscal Year Ended December 31, 2010

First Fiscal Quarter $ .71 $ .27
(Through March 22, 2010)

~~Shares Issued in Unregistered Transactions~~

During the fiscal year ended December 31, 2009 and carrying over to January 2010 we sold 3,360,000 shares of our common stock in unregistered transactions. All of the shares of common stock issued were issued in non registered transactions in reliance on Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). The shares of common stock issued were as follows:

	~~Placement Agent~~	~~336,000~~
	~~Private Placement investors~~	~~3,360,000~~

	~~Total~~	~~3,696,000~~

Although these shares were sold in 2009, only 726,000 of these shares were actually issued by our transferred agent in 2009. The balance of shares was physically issued in 2010. For purpose of the MDA contained herein, all of such shares were deemed to be issued in 2009 because such shares were in fact sold in 2009. However, the December 31, 2009 amounts for issued and outstanding shares in the financial statements contained in Item 8 do not include 2,700,000 unissued common shares represented by proceeds received prior to December 31, 2009 amounting to $675,000. These proceeds are recorded as additional paid-in capital for shares to be issued on the Balance Sheet as of December 31, 2009.

	High Bid		Low Bid
Fiscal Year Ended December 31, 2009

First Fiscal Quarter	$	.90	$	.61
Second Fiscal Quarter	$	.90	$	.35
Third Fiscal Quarter	$	.87	$	.50
Fourth Fiscal Quarter	$	.87	$	.50

Fiscal Year Ended December 31, 2010

First Fiscal Quarter	$	.71	$	.27
Second Fiscal Quarter	$	.46	$	.33
Third Fiscal Quarter	$	.45	$	.35
Fourth Fiscal Quarter	$	.45	$	.35

Holders

As of March ~~22, 2010~~29, 2011 there were ~~46,509,602~~49,400,605 shares of common stock outstanding and approximately ~~232~~239 shareholders of record.

Dividends

We have not paid any cash dividends since our inception and do not anticipate or contemplate paying dividends in the foreseeable future.

Purchases of Equity Securities by the Small Business Issuer and Affiliated Purchasers

None

Equity Compensation Plan Information

Plan Category	Number of Shares of common stock to be issued upon exercise of outstanding options		Weighted- average exercise price of outstanding options		Weighted- average term to expiration of options outstanding	Number of shares of common stock remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders (1)		3,287,188	$	1.27	7.6 yrs.		3,712,812
Equity compensation plans not approved by shareholders		—		—	—		—

~~Equity Compensation Plan Information~~

Plan Category
Number of Shares of common stock to be issued upon exercise of outstanding options
Weighted-average exercise price of outstanding options
Weighted-average term to expiration of options outstanding
Number of shares of common stock remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders (1) 3,765,000 $1.22 8.6 yrs. 3,235,000
Equity compensation plans not approved by shareholders --- --- --- ---

(1) Reflects number of shares of common stock to be issued upon exercise of outstanding options and warrants under all of our equity compensation plans, including our 2007 Stock Incentive Plan. No shares of common stock are available for future issuance under any of our equity compensation plans, except the 2007 Stock Incentive Plan. The outstanding options and restricted shares are not transferable for consideration and do not have dividend equivalent rights attached. Remaining average term to expiration of options outstanding is as of March ~~22, 2010.~~26, 2011.

Limitation on Directors’ Liability, Charter Provisions and Other Matters

Utah law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their shareholders for monetary damages for breach of directors’ fiduciary duty of care. The duty of care requires that, when acting on behalf of the corporation, directors must exercise an informed business judgment based on all material information reasonably available to them. Absent the limitations authorized by Utah law, directors are accountable to corporations and their shareholders for monetary damages for conduct constituting gross negligence in the exercise of their duty of care. Utah law enables corporations to limit available relief to equitable remedies such as injunction or rescission. Our Articles of Incorporation limits the liability of our directors to us or to our shareholders (in their capacity as directors but not in their capacity as officers) to the fullest extent permitted by Utah law.

The inclusion of this provision in our Articles of Incorporation may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter shareholders or management from bringing a lawsuit against directors for breach of their duty of care, even though such an action, if successful, might otherwise have benefited the Company and its shareholders.

Our Bylaws provide indemnification to our officers and directors and certain other persons with respect to certain matters. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to our directors and officers, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable.

Transfer Agent and Registrar

Our transfer agent is Fidelity Transfer Company, 8915 South 700 East, Suite 102, Sandy, Utah 84070; telephone (801) 562-1300.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

Not required by smaller reporting companies.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

In addition to historical information, this report contains forward-looking statements that involve risks and uncertainties, which may cause our actual results to differ materially from plans and results discussed in forward-looking statements. We encourage you to review the risks and uncertainties, discussed in the section entitled Item 1A “Risk Factors,” and the “Note Regarding Forward-Looking Statements,” included in the beginning of this Form 10-K. The risks and uncertainties can cause actual results to differ significantly from those forecasted in forward-looking statements or implied in historical results and trends.

The following discussion should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this form 10-K

Overview

We were formed under the name of Ogden Golf Co. Corporation. We terminated our retail golf store operations in December 2006. On February 14, 2008, we acquired Bio-Path, Inc. (“Bio-Path Subsidiary”) in a reverse merger transaction. In connection with the Merger, we changed our name to Bio-Path Holdings, Inc., we acquired Bio-Path Subsidiary as a wholly owned subsidiary and we appointed new officers and directors. In connection with the Merger, we also increased our authorized capital stock and adopted a Stock Incentive Plan. The Merger and related matters are further described in a Form 8-K filed with the Securities and Exchange Commission on February 19, 2008. Subsequent to the Merger, we changed our fiscal ~~ye ar~~year end from June 30th to December 31st.

Bio-Path Subsidiary was formed to finance and facilitate the development of novel cancer therapeutics. Our initial plan was to acquire licenses for drug technologies from The University of Texas M. D. Anderson Cancer Center (“M. D. Anderson”), to fund clinical and other trials for such technologies and to commercialize such technologies. Bio-Path has negotiated and executed three exclusive licenses (“License Agreements”) for three lead products and nucleic acid delivery technology. These licenses specifically provide drug delivery platform technology with composition of matter intellectual property that enables systemic delivery of antisense, small interfering RNA (“siRNA”) and small molecules for treatment of cancer. Bio-Path’s business plan is to act efficiently as an ~~i ntermediary~~intermediary in the process of translating newly discovered drug technologies into authentic therapeutic drugs candidates. Its strategy is to selectively license potential drug candidates for certain cancers, and, primarily utilizing the comprehensive drug development capabilities of M. D. Anderson, to advance these candidates into initial human efficacy trials (Phase IIa), and out-license each successful potential drug to a pharmaceutical company.

Plan of Operation

See Item 1 of this Form 10-K.

Results of Operations for Year Ended December 31, ~~2009.~~2010.

Except as discussed below, a discussion of our past financial results is not pertinent to the business plan of the Company on a going forward basis, due to the change in our business which occurred upon consummation of the Merger on February 14, 2008.

Results of Operations for the twelve months ended December 31, ~~2009~~2010 and December 31, ~~2008.~~2009.

We have no operating revenues since our ~~inception.~~inception; however, we did receive a grant in the amount of $244,479 and is accounted for as a Grant Receivable on our 2010 Balance Sheet and accounted for as other income on our Statements of Operations. The proceeds of the grant were received in the first quarter of 2011. Our operating expenses for the twelve months ended December 31, 2010 were $2,326,429 and included general and administrative expenses of $704,884, fair value expense of stock options and warrants of $477,356 and amortization expense of $ 197,268 for our technology licenses. We expended $1,144,189 on research and development costs during the year ended December 31, 2010.

Our operating expenses for the year ended December 31, 2009 were $1,973,122 and included general and administrative expenses of $721,029, fair value expense of stock options, warrants and ~~warrants~~stock issued for services of ~~$ 588,857~~$588,857 and amortization expense of $182,981 for our technology licenses. We expended ~~$480,255~~$663,236 on research and development costs during the year ended December 31, 2009.

Our operating expenses for the year ended December 31, 2008 were $2,893,828 and included general and administrative expenses of $587,163, fair value expense of stock options, warrants and stock issued for services of $1,801,239 and amortization expense of $171,954 for our technology licenses. We expended $333,472 on research and development costs during the year ended December 31, 2008.

We had interest income of ~~$3,384~~$1,302 for the twelve months ended December 31, ~~2009~~2010 compared to interest income of ~~$41,061~~$4,456 for the year ended December 31, ~~2008.~~2009. Our interest income was derived from cash and cash equivalents net of bank fees.

Our net loss was ~~$1,969,738~~$2,081,500 for the twelve months ended December 31, ~~2009~~2010 compared to a net loss of ~~$2,852,767~~$1,969,738 for the year ended December 31, ~~2008.~~2009. Net loss per share, both basic and diluted was $.04 for the twelve months ended December 31, 2010 and $.05 for the twelve months ended December 31, ~~2009 and $.07 for the twelve months ended December 31, 2008.~~2009.

Liquidity and Capital Resources as of December 31, ~~2009~~2010

At December 31, ~~2009,~~2010, we had cash of ~~$567,249~~$238,565 compared to ~~$1,507,071~~$567,249 at December 31, ~~2008.~~2009. We currently have no lines of credit or other arranged access to debt financing.

Net cash used in operating activities during the year ended December 31, ~~2009~~2010 was ~~$939,822~~$1,148,156 compared to ~~a surplus~~net cash used in operating activities of ~~$287,713~~$1,567,446 for the year ended December 31, ~~2008.~~2009. Inasmuch as we have not yet generated revenues and only limited income of $244,479 from the grant received in 2011, our entire expenses of operations ~~are~~in 2010 have been funded by our ~~cash assets.~~

Inproceeds from the ~~year ended December 31, 2008, we paid $150,000 for the cash portion~~sale of ~~the purchase price of the licenses we acquired from M. D. Anderson. In 2009 we paid or incurred $110,000 in license fees to M. D. Anderson.~~common stock.

Currently all of our cash is, and has been, generated from financing ~~activities.~~activities with the exception of the grant received of $244,479 in 2011. Net cash provided by financing activities in ~~2009~~2010 was ~~$737,624~~$1,049,127 compared to ~~$1,368,313~~$737,624 for ~~2008.~~2009. Since inception we have net cash from financing activities of ~~$3,776,403.~~$4,825,530. As discussed in our Plan of Operation above, we believe that our available cash will be sufficient to fund our liquidity and capital expenditure requirements through the second quarter of ~~2010.~~2011. We believe that we will need to raise approximately ~~$2,500,000~~$1,500,000 in net proceeds to fund our operations ~~in 2010~~through the second quarter of 2011 and approximately ~~$10,000,000~~$8,000,000 in net proceeds to completely implement our current business plan. We do need to raise additional capital during ~~2010,~~2011, in order to fund our operations in ~~2010~~2011 and ~~2011.~~2012. Through March 29, 2011, we have sold or committed to sell a total of $1,400,000 of our securities pursuant to a private placement. There can be no assurance that we will be able to continue to raise cash when it is needed to fund our operations.

Future capital needs

We anticipate that the total cost of additional needed funds for Phase I Clinical trials of our BP-100-1.01 will range from ~~$1,500,000~~$1,000,000 to ~~$2,000,000.~~$1,500,000. As mentioned in the preceding paragraph, we have raised or committed through March 29, 2011 approximately $1,400,000 to meet the required funds for the completion of BP-100-1.01 We anticipate that we must raise additional funds ~~for substantially that entire amount.~~to continue our business model.. Inasmuch as we have received nolimited income from operations, we are required to depend upon the sale of our securities as our principal sources of cash for the foreseeable future. There can be no assurance that we will be able to continue to raise cash through the sale of our securities in the future. The amount and pace of research and development work that we can do or sponsor, and our ability to commence and complete the clinical trials that are required in order for us to obtain FDA and foreign regulatory approval of products, depend upon the amount of money we have. We have attempted to reduce overhead expenses due to the limited amount of funds available. Future research and clinical study costs are not presently determinable due to many factors, including the inherent uncertainty of these costs and the uncertainty as to timing, source, and amount of capital that will become available for these projects. We intend to attempt to raise additional capital in the second and/or third quarter of ~~2010.~~2011.

~~Other Events~~

In April of 2008 we granted stock options for services to be performed over the next three years, to purchase in the aggregate 1,165,000 shares of our common stock. Terms of the stock option grants require, among other things, that the individual continues to provide services over the vesting period of the option, which is four or five years from the date that each option granted to the individual becomes effective. The exercise price of the options is $0.90 a share. In April of 2008 we awarded warrants for services to purchase in the aggregate 85,620 shares of our common stock. The exercise price is $0.90 a share. In April of 2008, we issued 200,000 shares of our common stock to a firm in connection with introducing Bio-Path, Inc. to its merger partner Ogden Golf. In O ctober, 2008 we granted a total of 2,500,000 employee stock options to our two corporate officers, Peter Nielsen and Douglas Morris.

~~As of March 22, 2010, a total of 1,985,937of these options are now vested, and the remaining 1,779,063 vest over an average of a eight year period with a weighted average price of $1.22.~~

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations and Commitments

Bio-Path has ~~recently~~ entered into three Patent and Technology License Agreements ~~(the “Licenses”)~~ with M. D. Anderson relating to its technology. ~~(See” Business~~See Item 1 of ~~Bio-Path”)~~this Form 10-K.

In September 2008, Bio-Path entered into a Supply Agreement with Althea Technologies, Inc. for the supply of drug product for the Company’s upcoming clinical trial of the drug BP-100-1.01 in human patients.

Inflation

The Company does not believe that inflation will negatively impact its business plans.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States has required the management of the Company to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company considers its critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including the following:

Concentration of Credit Risk --— Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash. The Company maintains its cash balances with one major commercial bank, J. P. Morgan Chase Bank. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. As a result, ~~$317,249~~all of the Company’s cash balances ~~is not~~on December 31, 2010 are covered by the FDIC.

Intangible Assets/Impairment of Long-Lived Assets. As of December 31, ~~2009,~~2010, Other Assets totals ~~$2,431,680~~$2,464,067 for the Company’s three technology licenses, comprised of ~~$2,814,166~~$3,043,821 in value acquiring the Company’s technology licenses and its intellectual property, less accumulated amortization of ~~$382,486.~~$579,754. The technology value consists of $460,000 in cash paid or accrued to be paid to ~~M. D.~~MD Anderson, plus 3,138,889 shares of common stock granted to ~~M. D.~~MD Anderson valued at $2,354,166. This value is being amortized over a fifteen year (15 year) period from November 7, 2007, the date that the technology licenses became effective. As of December 31, ~~2009~~2010 accrued ~~pay ments~~payments to be made to M. D. Anderson totaled ~~$125,000,~~$74,217, and such payments are expected to be made in ~~2010.~~2011. The Company accounts for the impairment and disposition of its long-lived assets in accordance with generally accepted accounting principles (GAAP). Long-lived assets are reviewed for events of changes in circumstances which indicate that their carrying value may not be recoverable. The Company estimates that approximately $190,000 will be amortized per year for each future year for the current value of the technology licenses acquired until approximately 2022.

Research and Development. Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with GAAP. For the year 2010, the Company had $1,144,189 of costs classified as research and development expense. Of this amount, $197,268 was for amortization of the technology license, $666,730 was for drug product material expensed and the balance of approximately $280,000 is comprised of costs for clinical trial expenses and hospital costs, drug product testing, advisory services and other R&D activities. For the year 2009, the Company had $480,255 of costs classified as research and development expense. Of this amount, approximately $280,000 is comprised of raw materials and costs for the Company’s raw material suppliers and contract drug manufacturer to perform unplanned additional engineering test runs of the Company’s lead drug product in advance of manufacturing a current Good Manufacturing Practice (cGMP) clinical batch of this drug for use in an ~~upco ming~~upcoming Phase I Clinical Trial.

Stock-Based Compensation --— The Company has accounted for stock-based compensation under the provisions of GAAP, which requires us to record an expense associated with the fair value of stock-based compensation. We currently use the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate.

For purposes of determining fair value, the Company used an average annual volatility of eighty four percent (84%), which was calculated based upon taking a weighted average of the volatility of the Company’s common stock and the volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted to management and officers was determined using this methodology to be $2,485,000, half of which was expensed at the date of grant and the balance will be expensed over the next three years based on the stock option service period.

In December of 2008 the Company made stock option grants for services over the next three years to purchase in the aggregate 100,000 shares of the Company’s common stock. Terms of the stock option grants require, among other things, that the individual continues to provide services over the vesting period of the option, which is three or four years from the date that each option granted to the individual becomes effective. The exercise price of the options is $0.30 a share. None of these stock options grants were for current management and officers of the Company. The Company determined the fair value of the stock options granted using the Black Scholes model and expenses this value monthly based upon the vesting schedule for each stock ~~o ption~~option award. For purposes of determining fair value, the Company used an average annual volatility of eighty four percent (84%), which was calculated based upon taking a weighted average of the volatility of the Company’s common stock and the volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted was determined using this methodology to be $21,450, which will be expensed over the next four years based on the stock option vesting schedule.

Total stock option expense for the year ~~2008~~2010 being reported on totaled ~~$1,465,189.~~$477,356. There were no stock option awards granted in ~~2009.~~2010. Total stock option expense for the year 2009 being reported on totaled $588,857.

Warrant Grants. In April of 2008 the Company awarded warrants for services to purchase in the aggregate 85,620 shares of the Company’s common stock. The exercise price is $0.90 a share. The warrants were one hundred percent (100%) vested upon issuance and were expensed upfront as warrants for services. The fair value of the warrants expensed was determined using the same methodology as described above for stock options. The total value of the warrants granted was determined using this methodology to be $36,050, the total amount of which was expensed in the second quarter 2008.

Net Loss Per Share. In accordance with GAAP, and SEC Staff Accounting Bulletin (“SAB”) No. 98, basic net loss per common share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Although there were warrants and stock options outstanding during ~~2008,~~2010 and 2009, no potential common shares shall be included in the computation of any diluted per-share amount when a loss from continuing operations exists. Consequently, diluted net loss per share is not presented in the financial statements for the ~~year~~years 2010 and 2009. The calculation of Basic and Diluted earnings per share for 2010 did not include 2,671,772 shares and 5,697,049 shares issuable pursuant to the exercise of vested common stock and vested warrants, respectively, as of December 31, 2010 as the effect would be anti-dilutive. The calculation of Basic and Diluted earnings per share for 2009 did not include ~~1,985,937~~985,937 shares and ~~7 45,620~~85,620 shares issuable pursuant to the exercise of vested common stock and vested warrants, respectively, as of December 31, 2009 as the effect would be anti-dilutive. The calculation of Basic and Diluted earnings per share for 2008 did not include 1,250,000 shares and 85,620 shares issuable pursuant to the exercise of vested common stock and vested warrants, respectively, as of December 31, 2008 as the effect would be anti-dilutive.

Comprehensive Income --— Comprehensive income (loss) is defined as all changes in a company’s net assets, except changes resulting from transactions with shareholders. At December 31, ~~2009,~~2010, the Company has no reportable differences between net loss and comprehensive loss.

Use of Estimates --— The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that the Company believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from the Company’s estimates.

Recent Accounting Pronouncements:

In ~~June 2009,~~January 2010, the ~~FASB~~Financial Accounting Standards Board (FASB) issued ~~FASB ASC 860-10-05 (Prior authoritative literature:~~ ~~FASB Statement 166,~~ ~~Accounting~~amended standards that require additional fair value disclosures. These amended standards require disclosures about inputs and valuation techniques used to measure fair value, as well as disclosures about significant transfers, beginning in the first quarter of 2010. This amendment did not have an impact on our financial statements. Additionally, these amended standards require presentation of disaggregated activity within the reconciliation for ~~Transfers~~fair value measurements using significant unobservable inputs (Level 3), beginning in the first quarter of ~~Financial Assets). FASB ASC 860-10-05 is effective for fiscal years beginning after November 15, 2009. The Company is currently assessing~~2011. These additional requirements are not expected to have a material impact on the ~~impact of FASB ASC 860-10-05 on its~~ financial ~~position and results of operations.~~statements.

~~In June 2009, the FASB issued FASB ASC 810-10-25 (Prior authoritative literature:~~ ~~FASB Statement 167-Amendment to FIN 46(R),~~ ~~Consolidation of Variable Entities)~~. FASB ASC 810-10-25 eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires a qualitative analysis to determine whether an enterprise’s variable interest gives it a controlling financial interest in a variable interest entity. FASB ASC 810-10-25 contains certain guidance for determining whether an entity is a variable interest entity. This statement also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. FASB ASC 810-10-25 will be effective as of the beginning of the Company’s 2010 fiscal year. The Company is currently evaluating the impact of the adoption of FASB ASC 810-10-25.

In October 2009, the FASB issued ~~ASU~~Accounting Standards Update No. ~~200-13,~~2009-13 for Revenue Recognition – Multiple Deliverable Revenue Arrangements ~~(“ASU 2009-13”)~~(Subtopic 605-25) “Subtopic”. ~~ASU 2009-13 updates~~This accounting standard update establishes the ~~existing multiple-element~~accounting and reporting guidance for arrangements under which the vendor will perform multiple revenue ~~arrangements guidance currently included~~– generating activities. Vendors often provide multiple products or services to their customers. Those deliverables often are provided at different points in ~~FASB ASC 605-25. The revised guidance provides for two significant changes~~time or over different time periods. Specifically, this Subtopic addresses how to ~~the existing multiple-element revenue arrangements guidance. The first change relates~~separate deliverables and how to ~~the determination of when the individual deliverables included in a multiple-element~~measure and allocate arrangement ~~may be treated as separate~~consideration to one or more units of accounting. ~~This change~~The amendments in this guidance will ~~result in~~affect the ~~requirement to separate more deliverables~~accounting and reporting for all vendors that enter into multiple-deliverable arrangements with their customers when those arrangements are within ~~an arrangement, ultimately leading to less revenue deferral. The second change modifies~~ the manner in which the transaction consideration is allocate d across the separately identified deliverables. Together, these changes will result in earlier recognition of revenue and related costs for multiple-element arrangements than under previous guidance. This guidance expands the disclosures required for multiple-element revenue arrangements. Effective for interim and annual reporting periods beginning after December 15, 2009. The Company is currently evaluating the potential impact, if any,scope of this ~~guidance~~Subtopic. This Statement is effective for fiscal years beginning on ~~its~~or after June 15, 2010. Earlier adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity will apply the amendments under this Subtopic retrospectively from the beginning of the entity’s fiscal year. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. Currently, Management believes this Statement will have no impact on the financial ~~statements.~~statements of the Company once adopted.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Information not required for smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMETARY DATA

The consolidated financial statements and supplementary data of the Company required in this item are set forth beginning on page F-1. In the calendar year 2008, our fiscal year end was changed from June 30th to December 31st.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On February 14, 2008, Bio-Path Holdings, Inc. (fka Ogden Golf Co. Corporation) acquired Bio-Path, Inc in a merger transaction. Such transaction is further described in a Form 8-K filed on February 19, 2008. Subsequent to the merger transaction, the Board of Directors of Bio-Path Holdings, Inc. (the “Registrant”) determined that it was in the best interests of the Registrant to appoint the accounting firm of Bio-Path, Inc., as the independent registered public accounting firm of the Registrant in place of the Registrant’s previous accounting firm. Disclosure regarding such change of accounting firm was contained in our Form 10-K for the year ended December 31, 2008. No additional disclosure regarding such change of accounting firm is incl uded in this Form 10-K pursuant to Instructions to Regulation S-K Section 304:1.None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

It is management’s responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”). Our management, including our principal executive officer, our principal operations officer, and our principal financial officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of ~~a date within ninety (90) days~~the end of the ~~filing date of~~period covered by this Annual Report on Form ~~10-K annual report.~~10-K. Following this review and evaluation , management collectively determined that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit ~~unde r~~under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including our chief executive officer, our chief operations officer, and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), is a process designed by, or under the supervision of, our principal executive officer, our principal operations officer, and our principal financial officer, and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Management’s assessment of the effectiveness of our internal controls is based principally on our financial reporting as of December 31, ~~2009.~~2010. In making our assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Our management, with the participation of our Chief Executive Officer (who is also the Acting Chief Financial Officer), has evaluated the effectiveness of our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as of December 31, ~~2009.~~2010. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the ~~rel iability~~reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”) and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The scope of management’s assessment of the effectiveness of internal control over financial reporting includes our consolidated subsidiary.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2009.~~2010. Based on this assessment, management believes that, as of that date, our internal control over financial reporting was effective.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to ~~temporary~~ rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.

Identification of Directors and Executive Officers

The current directors and officers of Bio-Path Holdings, Inc. who will serve until the next annual meeting of shareholders or until their successors are elected or appointed and qualified, are set forth below:

Name		Age	Position - Committee

Peter Nielsen	60	61	Chief Executive Officer/President/Chief Financial Officer/Treasurer/ Chairman of the Board and Director

Douglas P. Morris	54	55	Vice President of Corporate Development/ Secretary/Director
~~Dr. Thomas Garrison~~	51	~~Director~~

Gillian Ivers-Read	56	57	Director

Background Information

Peter Nielsen, CEO is a co-founder of Bio-Path, serving as its Chief Executive Officer, President and Chief Financial Officer/Treasurer and Chairman of the Board of Directors. Mr. Nielsen has developed a close working relationship over the last five years with key individuals at M. D. Anderson and suppliers. Mr. Nielsen has a broad management background in senior management, leading turnarounds of several large companies. He also has experience in finance, product development, cost and investment analysis, manufacturing and planning. He has also worked with several other biotech companies developing and executing on strategies for growth and is currently a Director of Synthecon, Inc., a ~~manu facturer~~manufacturer of 3D bioreactors. Prior to joining Bio-Path, Mr. Nielsen served as Chief Financial Officer of Omni Energy Services Corp., a NASDAQ traded energy Services Company. Mr. Nielsen was a Lieutenant in the U.S. Naval Nuclear Power program where he was Director of the Physics Dept. and was employed at Ford Motor Company in product development. He holds engineering and M.B.A. finance degrees from the University of California-Berkeley.

Douglas P. Morris is a co-founder of Bio-Path serving as its Vice President of Corporate Development, Secretary and a Director. Since 1993, Mr. Morris has been an officer and director of Celtic Investment, Inc., a financial services company. Celtic Investment owns Celtic Bank, an FDIC insured industrial loan company chartered under the laws of the State of Utah. Since 1990, Mr. Morris owns and operates Hyacinth Resources, LLC (“Hyacinth”). Hyacinth is a privately held business consulting firm. Hyacinth consults with privately held and publicly held corporations relating to management, merger and acquisitions, debt and equity financing, capital market access, and market support for publicly traded securities. Hyacinth also holds investments purchased by Mr. Morris. In 2007, Mr. Morris formed Sycamore Ventures, LLC, a privately-held consulting firm. Mr. Morris has a BA from Brigham Young University and a Masters in Public Administration from the University of Southern California.

~~Dr. Thomas Garrison~~ is a practicing medical doctor with over twenty years experience in the clinical medical field with extensive administration responsibilities. He is residency trained and board certified in emergency medicine. He has extensive experience in high-acuity, high-volume emergency departments with large trauma referral bases. He has co-authored several textbooks on emergency medicine. In addition to his professional medical career, he has been involved in a number of successful entrepreneurial pursuits. He is currently involved as the Medical Director of Sono Bello Body Contour Centers and has o wnership in several of the centers. Sono Bello is a nationally growing Company, specializing in minimally invasive liposuction and non-invasive body contouring. He is responsible for medical oversight, written policies, regulatory input, equipment selection, pharmaceuticals, training and other medically relevant issues.

~~He was formally involved with Advanced Laser Clinics, Inc., serving as Corporate Medical Director. He received his Doctor of Medicine~~, ~~Uniformed Services University of the Health Sciences, Bethesda, Maryland in 1982, and his Bachelor of Science; Chemistry Major, Engineering Minor from the University of Utah in 1978.~~

Gillian Ivers-Read. Ms. Ivers-Read is currently head of Techinical Operations at Clovis Oncology, a recently formed bio-technology company. Since, April 2002, Ms. Ivers-Read had been Executive Vice President, Development Operations of Pharmion Corp., a publicly held biotech company. From 1996 to 2001, Ms. Ivers-Read held various regulatory positions with Hoechst Marion Roussel and its successor Aventis Pharmaceuticals, Inc., where she most recently held the position of Vice President, Global Regulatory Affairs. From 1994 to 1996, Ms. Ivers-Read was Vice President, Development and Regulatory Affairs for Argus Pharmaceuticals and ~~f rom~~from 1984 to 1994 she served as a regulatory affairs director for Marion Merrell Dow.

Board of Directors

Our operations are managed under the broad supervision of the board of directors, which has ultimate responsibility for the establishment and implementation of our general operating philosophy, objectives, goals and policies. Our board of directors is currently comprised of two independent directors and two non-independent directors. The board of directors has determined that current director, Gillian Ivers-Read is “independent” as independence is defined under the listing standards for The Nasdaq Stock Market. The board based these determinations primarily on a review of the responses our directors provided to questions regarding employment and compensation history, affiliations and family and other relationships.

Committees of the Board of Directors

We currently have a compensation committee of the Board of Directors consisting of Ms. Gillian Ivers-Read and Douglas P. Morris. We anticipate as our Board of Directors increases in size, we will appoint an audit committee and a nominating and corporate governance committee.

Key Consultants

Bradley G. Somer, MD. Dr. Somer is employed by ACORN CRO, a full service, oncology-focused clinical research organization (CRO), under the agreement with ACORN, Dr. Somer will serve as Bio-Path’s Medical Officer and medical liaison for the conduct of the Company’s upcoming Phase I clinical study of liposomal BP-100-1.01 in refractory or relapsed Acute Myeloid Leukemia (AML), Chronic Myelogenous Leukemia (CML), Acute Lymphoblastic Leukemia (ALL) and Myelodysplastic Syndrome (MDS).

Kevin Rando, MBA. Mr. Rando has nearly twenty years experience in the pharmaceutical industry as a clinical research professional in clinical trial operations and as a monitor of clinical trials. He has experience in clinical research associate staffing, management, & training and protocol site management in pharmacy audit. Mr. Rando also performs protocol and CRF design/review and database review.

Thomas A. Walker, Ph.D. Dr. Walker was appointed as Bio-Path’s Chemistry, Manufacturing and Controls CMC Development Specialist. Dr. Walker also has more than twenty years of broad analytical chemistry experience in the pharmaceutical industry. He was involved significantly with the start up and qualification of Quality Control laboratories and a Quality Assurance department for GEL Analytics, a pharmaceutical drug supplier. He also has provided oversight in setting up and qualifying current Good Manufacturing Practice (cGMP) analytical and Good Laboratory Practices (GLP) analytical and bioanaly tical laboratories. His experience in drug development includes preparation of regulatory filings for pharmaceutical drug products and experience managing preformulation, analytical methods development/validation and drug delivery departments. Dr. Walker has authored numerous articles and a book chapter covering various topics in analytical chemistry. Thomas Walker has a Ph.D. in Analytical Chemistry from The University of Iowa and a B.S. in Chemistry from Oral Roberts University.

Alan MacKenzie, Ph.D. Dr. MacKenzie is a leading lyophilization expert with a particular emphasis on developing lyophilization processes for solvents based products. Dr. MacKenzie has been a Professor at the University of Washington.

Ana Tari, Ph.D. Dr. Tari is an Associate Professor at the University of Florida at Gainsville. Dr. Tari was the lead researcher who has developed Bio-Path’s lead cancer drug BP-100-1.01. In addition to her position at the University of Florida, Dr. Tari serves as Director of Preclinical Operations and Research for Bio-Path Holdings, Inc.

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Other Involvement in Certain Legal Proceedings

There have been no events under any bankruptcy act, no criminal proceedings and any judgments or injunctions material to the evaluation of the ability and integrity of any director or executive officer during the last five years.

Code of Ethics

We have adopted a Code of Ethics, or our Code of Ethics, that applies to directors, officers and employees and complies with the requirements of Item 406 of Regulation S-K and the listing standards of the NASDAQ Global Market. Our Code of Ethics is located on our website (www.biopathholdings.com). Any amendments or waivers to our Code of Ethics will be promptly disclosed on our website and as required by applicable laws, rules and regulations of the Securities and Exchange Commissions.

Communications with Board Members

We have not adopted a formal process by which shareholders may communicate with the Board of Directors.

Compliance with Section 16(a)

No disclosure required

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The compensation committee (a) annually reviews and determines salaries, bonuses and other forms of compensation paid to our executive officers and management; (b) selects recipients of awards of incentive stock options and non-qualified stock options and establishes the number of shares and other terms applicable to such awards; and (c) construes the provisions of and generally administers the 2007 Stock Incentive Plan (the “2007 Plan”). We do not currently have a Compensation Committee Charter.

The compensation committee of our board of directors has overall responsibility for the compensation program for our executive officers. Our compensation committee consists of an independent director and a non-independent director. The compensation committee is responsible for establishing policies and otherwise discharging the responsibilities of the board with respect to the compensation of our executive officers, senior management, and other employees. In evaluating executive officer pay, the compensation committee may retain the services of an independent compensation consultant or research firm and consider recommendations from the chief executive officer and persons serving in supervisory positions over a particular officer or executive officer with respect to goals and compensation of the other executive officers. ~~Th e~~The compensation committee assesses the information it receives in accordance with its business judgment. The compensation committee also periodically is responsible for administering all of our incentive and equity-based plans.

All decisions with respect to executive compensation are first approved by the compensation committee and then submitted, together with the compensation committee’s recommendation, to the members of the board for final approval.

Elements of compensation for our executives generally include:

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base salary (typically subject to upward adjustment annually based on individual performance);

stock option awards;

health, disability and life insurance.

Our primary objective with respect to executive compensation is to design a reward system that will align executives’ compensation with Bio-Path’s overall business strategies and attract and retain highly qualified executives. The principle elements of executive compensation are salary, bonus and will, during fiscal 2008, include stock option grants. We intend to stay competitive in the marketplace with our peers. In considering the elements of compensation, Bio-Path considers its current cash position in determining whether to adjust salaries, bonuses and stock option grants. The following table sets forth summary information about the compensation paid to our officers.

Summary Compensation Table

Name	Year	Salary ($)	Bonus ($)	Stock Option ($)	Total ($)	Year	Salary ($)		Bonus ($)			Stock Option ($)		Total ($)
Peter Nielsen, CEO, President,	2009	$250,000	-0-	-0-	$250,000	2010	$	250,000	$	100,000	a/		-0-	$	350,000
Chairman	2008	$250,000	-0-	$1,491,000*	$1,741,000	2009	$	250,000		-0-			-0-	$	250,000
	2007	$133,333	$20,000	-0-	$153,333	2008	$	250,000	$			$	1,491,000	$	1,741,000
Douglas P. Morris, VP Corporate Development/Director	2009	$120,000	-0-	-0-	$120,000

Douglas P. Morris, VP Corporate						2010	$	120,000	$	48,000	a/		-0-	$	168,000
Corporate Development Director	2008	$120,000	-0-	$994,000*	$1,114,000	2009	$	120,000		-0-			-0-	$	120,000
	2007	$ 80,000	-0-	-0-	$ 80,000	2008	$	120,000		-0-		$	994,000	$	1,114,000

*a/ In 2008, the Board’s compensation committee awarded Mr. Nielsen and Mr. Morris each a bonus equal to 40% of their base salary. During 2010, the Company paid these bonuses to Mr. Nielsen and Mr. Morris in the amounts of $100,000 and $48,000, respectively. Substantially all of this expense had been previously accrued as bonus expense in 2009 and in the first and second quarters of 2010.

In 2008, we granted Mr. Nielsen options to purchase 1,500,000 shares of our common stock at $1.40 per share, the fair market value on the date of grant. In 2008 we granted Mr. Morris options to purchase 1,000,000 shares of our common stock at $1.40 per share, the fair market value on the date of grant. Each of these grants of options were ½ vested at the time of grant with the remaining ½ vesting monthly over a three year period. This column shows the grant date fair value of awards computed in accordance with stock-based compensation accounting rules.

Stock Option Grants and Exercises During the Fiscal Years Ended December 31, ~~2009~~2010 and ~~2008~~2009

The following table sets forth information concerning stock option grants made during the fiscal year ended December 31, ~~2009~~2010 and ~~2008,~~2009, to our executive officers named in the “Summary Compensation Table” above. The fair value information in the far right column is for illustration purposes only and is not intended to predict the future price of our Common Stock. The actual future value of the stock options will depend on the market value of the Common Stock.

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GRANTS OF PLAN-BASED AWARDS

All Other

Options

Awards:

Exercise

Number of

or Base

Grant Date

Securities

Price of

Fair Value

Grant

Underlying

Option

of Option

Name

Date

Options (#)

Awards (1)

Awards

Peter Nielsen

10/7/08

1,500,000

1.40

.99

Douglas Morris

10/7/08

1,000,000

1.40

.99

   All Other
   Options
   Awards: Exercise
   Number of or Base Grant Date
   Securities Price of Fair Value
Grant Underlying Option of Option
Name Date Options (#) Awards (1) Awards

Peter Nielsen 10/7/08 1,500,000 $1.40 $ .99
Douglas Morris 10/7/08 1,000,000 $1.40 $ .99

(1) This column shows the exercise price for the stock options granted, which was the closing price of our Common Stock on October 7, 2008, the date of grant.

~~For the fiscal year ended December 31, 2007 neither of the persons listed in the Summary Compensation Table were granted options or other rights to purchase shares of our common stock.~~ In October 2008 we granted our Chief Executive Officer, Peter Nielsen, an option to purchase 1,500,000 shares of our common stock at a price of $1.40 per share. In October 2008 we also granted our Vice President of Corporate Development, Douglas P. Morris, an option to purchase 1,000,000 shares of our common stock at a price of $1.40 per share. Each of the options provides that one-half of the option shares are immediately vested and the remaining one-half of the option shares vest in 36 equal monthly increments. The options are exercisable for a term of ten years from the date of grant.

The following table sets forth certain information with respect to outstanding stock option and warrant awards of the named executive officers for the fiscal year ended December 31, ~~2009.~~2010.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, ~~2009~~2010

Option/Warrant Awards
Name	Number of Securities Underlying Unexercised Options Exercisable (#)(1)	Number of Securities Underlying Unexercised Options Unexercisable (#)(1)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date)	Number of Securities Underlying Unexercised Options Exercisable (#)(1)		Number of Securities Underlying Unexercised Options Unexercisable (#)(1)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date)
Peter Nielsen	1,500,000	0	-	$1.40	Oct 2018		1,500,000		0		-	$	1.40	Oct 2018
Douglas P. Morris	1,000,000	0	-	$1.40	Oct 2018		1,000,000		0		-	$	1.40	Oct 2018

(1)	Except as indicated, the options granted vest and become exercisable in monthly installments over a three year period, commencing on the date of grant.

Option Exercises

No officer or director exercised any option during the fiscal year ended December 31, ~~2009.~~2010.

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Employment Agreements

Bio-Path subsidiary has entered into employment agreements with its Chief Executive Officer, Peter Nielsen and its Vice President of Corporate Development, Douglas P. Morris, dated May 1, 2007. The employment agreement for Mr. Nielsen provides for a base salary of $250,000. The employment agreement for Mr. Morris provides for a base salary of $120,000.

Director Compensation

Currently, outside directors received cash compensation of $500 for each Board meeting attended and $250 for each telephonic Board meeting that they participate in. Outside directors also receive annual stock options to purchase 25,000 shares of the Company’s common stock for each 12 month period they serve as a director.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

The following table sets forth information regarding shares of our common stock beneficially owned at March ~~22, 2010~~26, 2011 by: (1) each of our officers and directors; (ii) all officers and directors as a group; and (iii) each person known by us to beneficially own five percent or more of the outstanding Units of its common stock.

Shareholder Shares Owned Percentage

Peter Nielsen (1) (2)
6,289,433 13.20%

Douglas P. Morris (1) (3)
2,383,911 5.04%

Dr. Tom Garrison (1) (4)
3,421,767 7.24%

Gillian Ivers-Read (1) (5)
52,083 *
M. D. Anderson 6,930,025 12.03%

Tom Fry (6)
5,593,334 13.20%

All officers and
directors as a group (7)
12,147,194 24.68%

Total 46,509,602 100.00%

Shareholder	Shares Owned		Percentage

Peter Nielsen (1) (2)		6,560,265	12.9	%
Douglas P. Morris (1) (3)		2,564,467	5.1	%
Dr. Tom Garrison (4)		3,396,767	6.8	%
Gillian Ivers-Read (1) (5)		198,609	*
M. D. Anderson 7515 S. Main, Suite 490, Unit 0510 Houston Texas 77030		6,930,025	14.0	%

All officers and directors as a group(1)-(5)		12,720,108	24.1	%

*Less than 1%

(1) These are the officers and directors of Bio-Path.

(2) Includes 5,164,433 shares owned of record and ~~1,125,000~~1,395,832 shares issuable upon the exercise of options that are currently exercisable or will be exercisable within 60 days Mr. Nielsen’s additional options vest monthly over the next 2412 months. If such option were to fully vest, he would have the right to purchase a total of 1,500,000 shares at $1.40 per share.

(3) Includes 1,633,911 shares owned of record and ~~750,000~~930,556 shares issuable upon the exercise of options that are currently exercisable or will be exercisable within 60 days. Mr. Morris’s additional options vest monthly over the next 2412 months. If such option were to fully vest, he would have the right to purchase a total of 1,000,000 shares at $1.40 per share.

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(4) Includes 2,646,767 shares owned of record ~~and 25,000 shares issuable upon the exercise of options that are currently exercisable~~ and 750,000 shares issuable upon the exercise of currently exercisable warrants at a price of $1.50 per share. Dr. Garrison’s owns additional options which vest monthly over the next 36 months.

(5) Ms. Ivers-Read has vested a total of ~~52,083~~198,609 options, exercisable at $.90 per share. Ms. Ivers-Read has a total, if fully vested, to purchase an additional ~~397,917~~251,391 shares of common stock at a price of $0.90 per share. These options vest over a period of 36 months.

~~(6) Includes 2,649,3555 shares owned of record by Amy fry, the spouse of Tom fry and 2,943,729 shares owned of record by Brick & Mortar, LLC, an affiliate of Tom Fry.~~

~~(7) Includes 9,445,111 shares of record and 2,702,083 shares issuable upon the exercise of currently vested options and warrants.~~

Stock Options

In April of 2008 the Company made stock option grants for services over the next three years to purchase in the aggregate 1,165,000 shares of the Company’s common stock. Terms of the stock option grants require, among other things, that the individual continues to provide services over the vesting period of the option, which is four or five years from the date that each option granted to the individual becomes effective. The exercise price of the options is $0.90 a share. The Company determined the fair value of the stock options granted using the Black Scholes model and expenses this value monthly based upon the vesting schedule for each stock option award. For purposes of determining fair value, the Company used an average annual ~~volati lity~~volatility of seventy two percent (72%), which was calculated based upon an average of volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted through December 31, ~~2009~~2010 was determined using this methodology is $761,590, which ~~will be~~is being expensed over the ~~next~~ six years from the date of grant based on the stock option vesting schedule.

In October 2008 we granted our Chief Executive Officer, Peter Nielsen, an option to purchase 1,500,000 shares of our common stock at a price of $1.40 per share. In October 2008 we also granted our Vice President of Corporate Development, Douglas P. Morris, an option to purchase 1,000,000 shares of our common stock at a price of $1.40 per share. Each of the options provides that one-half of the option shares are immediately vested and the remaining one-half of the option shares vest in 36 equal monthly increments. The options are exercisable for a term of ten years from the date of grant.

Warrants

We have a total of 85,620 outstanding warrants issued for service that are fully vested and which were expensed in the second quarter of 2008. In addition we have a total of 5,611,429 outstanding warrants that were sold to investors as part of a Unit in various Private Placement Offerings. The warrants have an exercise period of two years and an exercise price of$1.50 per share. The warrants expire beginning in June 2011 through January, 2012.

Equity Compensation Plan Information

We have no Equity Compensation Plans except for our Stock Incentive Plan.

4948

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

During 2009, director Thomas Garrison purchased 750,000 shares of Bio-Path’s common stock for a total of $187,500. These shares were purchased in connection with a private offering and were on the same terms and conditions applicable to all other purchasers. Each purchaser was issued one warrant for each share purchased and accordingly, Dr. Garrison was issued Warrants to purchase 750,000 shares. The exercise price of such warrants is $1.50 per share and are exercisable until November 30, 2011.

As part of the license agreements with M. D. Anderson, Bio-Path Subsidiary issued M. D. Anderson 3,138,889 shares of our common stock. In addition, M. D. Anderson researchers purchased shares of our subsidiary’s common stock at par value. These shares issued to M. D. Anderson and such researchers were converted into a total of 8,858,873 shares of our common stock in the merger.

ITEM 14. ~~Principal Accounting Fees and Services~~ PRINCIPAL ACCOUNTING FEES AND SERVICES

Our entire Board currently serves as our audit committee. The Audit Committee has adopted policies and procedures to oversee the external audit process including engagement letters, estimated fees and solely pre-approving all permitted non-audit work performed by Mantyla McReynolds, LLC. The Committee has pre-approved all fees for work performed.

The Audit Committee has considered whether the services provided by Mantyla McReynolds as disclosed below in the captions “Audit-Related Fee”, “Tax Fees” and “All Other Fees” and has concluded that such services are compatible with the independence of Mantyla McReynolds as the Company’s principal accountants.

For the fiscal years ~~2009~~2010 and ~~2008,~~2009, the Audit Committee pre-approved all services described below in the captions “Audit Fees”, “Audit-Related Fees”, “Tax Fees” and “All Other Fees”. For fiscal year 2009 and 2008, no hours expended on Mantyla McReynolds’ engagement to audit the Company’s financial statements were attributed to work performed by persons other than full-time, permanent employees of Mantyla McReynolds.

The aggregate fees billed for professional services by Mantyla McReynolds in fiscal year ~~2009~~2010 and ~~2008:~~2009:

Type of Fees 2008 2009
Audit Fees

$49,940

$43,950

Audit-Related Fees - -
Tax Fees 887 4,746
All Other Fees
Total $50,827 $48,696

Type of Fees	2009		2010
Audit Fees	$	43,950	$	36,320
Audit-Related Fees		-		-
Tax Fees		4,746		2,046
All Other Fees		-		8,445
Total	$	48,696	$	46,811

5049

~~ITEM 15.~~ ~~EXHIBITS~~

ITEM 15.

EXHIBITS

Exhibits

	Exhibit Number		Exhibit
2.1	~~2.1~~	Agreement and Plan of Merger and Reorganization dated September 27, 2007, by and among Ogden Golf Co. Corporation, a Utah corporation (the registrant), Biopath Acquisition Corp., a Utah corporation and wholly owned subsidiary of the registrant, and Bio-Path, Inc., a Utah corporation (incorporated by reference to exhibit 2.1 to the registrant’s current report on Form 8-K filed on September 27, 2007).

3.1		Restated Articles of Incorporation (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008).

3.2		Bylaws (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008)

3.3		Articles of Merger relating to the merger of Biopath Acquisition Corp. with and into Bio-Path, Inc. (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on February 19, 2008).

3.4		Amendment No. 1 to Bylaws (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on June 21, 2010).

4.1		Specimen Stock certificate (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008).

4.2		Form of Warrant issued to Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 4.1 to the registrant’s current report on Form 8-K filed on June 4, 2010).

10.1		Employment Agreement – Peter Nielsen (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on February 19, 2008).

10.2		Employment Agreement – Douglas P. Morris (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on February 19, 2008).

10.3		Drug Product Development and Clinical Supply Agreement (incorporated by reference to exhibit 10.1 to the registrant’s current report on Form 8-K filed on October 16, 2008).

10.4		Amended 2007 Stock Incentive Plan (incorporated by reference to exhibit 4.1 to the registrant’s registration on Form S-8 filed on December 10, 2008).
	~~14.1~~	~~Code of Ethics~~
10.5		Patent and Technology License Agreement (incorporated by reference to exhibit 10.1 to the registrant’s current report on Form 8-K filed on September 24, 2009).
	~~21.1~~
10.6		Purchase Agreement, dated as of June 2, 2010, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to exhibit 10.1 to the registrant’s current report on Form 8-K filed on June 4, 2010).

21.1*		Subsidiaries of Bio-Path Holdings, Inc.

31*
	~~23.1~~	~~Consent of Independent Registered Public Accounting Firm~~
	31	Certificate of Chief Executive Officer/Chief Financial Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 Sarbanes Oxley Act of 2002.
	32
32*		Certificate of Chief Executive Officer/ Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

* Filed herewith.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIO-PATH HOLDINGS, INC.

Dated: March ~~30, 2010~~31, 2011	By: ~~/s/~~	/s/ Peter Nielsen
		Peter Nielsen
		President
		Chief Executive Officer
		Chief ~~Accounting Officer/Principal~~ Financial Officer Principal Accounting Officer

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

Date		Title		Signature

March ~~30, 2010~~31, 2011		President/Chief Executive Officer/~~Principal~~Chief Financial Officer/~~President/ Director~~Principal Accounting Officer/	~~/s/~~	/s/ Peter Nielsen
		Director		Peter Nielsen

March ~~30, 2010~~31, 2011		Secretary and	~~/s/~~	/s/ Douglas P. Morris
		Director		Douglas P. Morris

~~March 30, 2010~~	~~Director~~	~~/s/ Dr. Thomas Garrison~~
��		~~Dr. Thomas Garrison~~


March ~~30, 2010~~31, 2011		Director		/s/ Gillian Ivers-Read
		~~Dr.~~		Gillian Ivers-Read

Index to Financial Statements

Bio-Path Holdings, Inc. Financial Statements		Page

	Report of Independent Registered Public Accounting Firm	F-2

	Consolidated Balance Sheets	F-3

	Consolidated Statements of Operations	F-4

	Consolidated Statements of Cash Flows	F-5

	Consolidated Statement of Shareholders’ Equity	F-6

	Notes to Financial Statements	F-7

~~F-1~~

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Bio-Path Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Bio-Path Holdings, Inc. [a development stage company] as of December 31, ~~2009~~2010 and ~~2008,~~2009, and the related consolidated statements of operations, cash flows, and stockholders' equity, for the years ended December 31, ~~2009~~2010 and ~~2008,~~2009, and the period from inception to December 31, ~~2009.~~2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a ~~t est~~test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bio-Path Holdings, Inc., as of December 31, ~~2009~~2010 and ~~2008,~~2009, and the results of their operations and their cash flows for the years ended December 31, ~~2009~~2010 and ~~2008,~~2009, and the period from inception to December 31, ~~2009~~2010 in conformity with accounting principles generally accepted in the United States of America.

/s/ Mantyla McReynolds LLC

Mantyla McReynolds LLC

Salt Lake City, Utah

March ~~30, 2010~~31, 2011

F-2

BIO-PATH HOLDINGS, INC.
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2009 AND 2008

December 31,
2009 2008
ASSETS
Current assets
Cash $ 567,249 $ 1,507,071
Drug product for testing 608,440 292,800
Other current assets 74,297 82,772
Total current assets 1,249,986 1,882,643

Other assets
Technology licenses 2,814,166 2,704,167
Less Accumulated Amortization (382,486 ) (199,505 )
2,431,680 2,504,662
TOTAL ASSETS $ 3,681,666 $ 4,387,305

LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 6,453 185,843
Accrued expenses 133,450 16,442
Accrued license payments 125,000 125,000
Total current liabilities 264,903 327,285
Long term debt - -
TOTAL LIABILITIES 264,903 327,285

Shareholders' Equity
Preferred Stock, $.001 par value - -
10,000,000 shares authorized, no shares issued and outstanding
Common Stock, $.001 par value, 200,000,000 shares authorized 42,649 41,923
42,649,602 and 41,923,602 shares issued and outstanding
as of 12/31/09 and 12/31/08, respectively
Additional paid in capital 7,803,016 7,152,261
Additional paid in capital for shares to be issued * 675,000
Accumulated deficit during development stage (5,103,902 ) (3,134,164 )

Total shareholders' equity 3,416,763 4,060,020

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 3,681,666 $ 4,387,305

* Represents 2,700,000 shares of common stock

BIO-PATH HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2010 AND 2009

	December 31,
	2010			2009

ASSETS

Current assets
Cash	$	238,565		$	567,249
Grants receivable		244,479
Prepaid drug product for testing		88,400			608,440
Other current assets		72,993			74,297
Total current assets		644,437			1,249,986

Other assets
Technology licenses		3,043,821			2,814,166
Less Accumulated Amortization		(579,754	)		(382,486	)
		2,464,067			2,431,680

TOTAL ASSETS	$	3,108,504		$	3,681,666


LIABILITIES & SHAREHOLDERS' EQUITY

Current liabilities
Accounts payable		88,400			6,453
Accrued expense		84,141			133,450
Accrued license payments		74,217			125,000
Total current liabilities		246,758			264,903

Long term debt		-			-

TOTAL LIABILITIES		246,758			264,903

Shareholders' Equity
Preferred Stock, $.001 par value 10,000,000 shares authorized, no shares issued and outstanding		-			-
Common Stock, $.001 par value, 200,000,000 shares authorized 49,400,605 and 42,649,602 shares issued and outstanding as of 12/31/10 and 12/31/09, respectively		49,401			42,649
Additional paid in capital		9,719,147			7,803,016
Additional paid in capital for shares to be issued a/ b/		278,600	a/		675,000	b/
Accumulated deficit during development stage		(7,185,402	)		(5,103,902	)
Total shareholders' equity		2,861,746			3,416,763

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	3,108,504		$	3,681,666

a/ Represents 928,667 shares of common stock
b/ Represents 2,700,000 shares of common stock

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

F-3

BIO-PATH HOLDINGS, INC.

(A Development Stage Company)

BIO-PATH HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 AND THE PERIOD
FROM INCEPTION (MAY 10, 2007) THROUGH DECEMBER 31, 2009

From inception
05/10/07 to
2009 2008 12/31/09

Revenue $ - $ - $ -

Operating expense

Research and development 480,255 333,472 821,901
General & administrative 721,029 587,163 1,579,473
Stock issued for services - 300,000 300,000
Stock options & warrants 588,857 1,501,239 2,090,096
Amortization 182,981 171,954 382,486

Total operating expense 1,973,122 2,893,828 5,173,956

Net operating loss $ (1,973,122 ) $ (2,893,828 ) $ (5,173,956 )

Other income
Interest income 3,384 41,061 70,054
Total Other Income 3,384 41,061 70,054

Net Loss $ (1,969,738 ) $ (2,852,767 ) $ (5,103,902 )

Loss per share

Net loss per share, basic and diluted $ (0.05 ) $ (0.07 ) $ (0.14 )

Basic and diluted weighted average number of common shares outstanding 42,347,102 41,162,099 37,352,654
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND THE PERIOD

FROM INCEPTION (MAY 10, 2007) THROUGH DECEMBER 31, 2010

							From inception
							05/10/07 to
	2010			2009			12/31/10

Revenue	$	-		$	-		$	-

Operating expense

Research and development		1,144,189			663,236			2,348,577
General & administrative		704,884			721,029			2,284,357
Stock issued for services		-			-			300,000
Stock options & warrants		477,356			588,857			2,567,451
Total operating expense		2,326,429			1,973,122			7,500,385

Net operating loss	$	(2,326,429	)	$	(1,973,122	)	$	(7,500,385	)

Other income
Interest income		1,302			4,456			73,404
Other income		244,479			-			244,479
Other expense		(852	)		(1,072	)		(2,900	)
Total Other Income		244,929			3,384			314,983

Net Loss Before Income Taxes		(2,081,500	)		(1,969,738	)		(7,185,402	)

Income tax expense		-			-			-

Net Loss	$	(2,081,500	)	$	(1,969,738	)	$	(7,185,402	)

Loss per share

Net loss per share, basic and diluted	$	(0.04	)	$	(0.05	)	$	(0.18	)

Basic and diluted weighted average number of common shares outstanding		48,153,321			42,347,102			40,298,290

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

F-4

BIO-PATH HOLDINGS, INC.

(A Development Stage Company)

BIO-PATH HOLDINGS, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 AND THE PERIOD
FROM INCEPTION (MAY 10, 2007) THROUGH DECEMBER 31, 2009

From inception
05/10/2007 to
2009 2008 12/31/2009

CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (1,969,738 ) $ (2,852,767 ) $ (5,103,902 )
Adjustments to reconcile net loss to net cash used in operating activities
Amortization 182,981 171,954 382,486
Common stock issued for services 300,000 300,000
Stock options and warrants 588,857 1,501,239 2,090,096
(Increase) decrease in assets
Restricted escrow cash 208,144
Drug product for testing (315,640 ) (292,800 ) (608,440 )
Other current assets 8,475 (55,338 ) (74,298 )
Increase (decrease) in liabilities
Accounts payable and accrued expenses (62,381 ) 297,112 264,904
Escrow cash payable (208,144 )
Net cash used in operating activities (1,567,446 ) (930,600 ) (2,749,154 )

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of exclusive license (110,000 ) (150,000 ) (460,000 )
Net cash used in investing activities (110,000 ) (150,000 ) (460,000 )

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes - - 435,000
Cash repayment of convertible notes - - (15,000 )
Net proceeds from sale of common stock 737,624 1,368,313 3,356,403
Net cash from financing activities 737,624 1,368,313 3,776,403

NET INCREASE/(DECREASE) IN CASH (939,822 ) 287,713 567,249
Cash, beginning of period 1,507,071 1,219,358 -
Cash, end of period $ 567,249 $ 1,507,071 $ 567,249

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Non-cash financing activities
Common stock issued upon conversion of convertible notes $ 420,000
Common stock issued to Placement Agent $ 78,970 $ 294,845
Common stock issued to M.D. Anderson for technology license $ 2,354,167
CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND THE PERIOD

FROM INCEPTION (MAY 10, 2007) THROUGH DECEMBER 31, 2010

							From inception
							05/10/2007 to
	2010			2009			12/31/2010

CASH FLOW FROM OPERATING ACTIVITIES

Net loss	$	(2,081,500	)	$	(1,969,738	)	$	(7,185,402	)

Adjustments to reconcile net loss to net cash used in operating activities
Amortization		197,268			182,981			579,754
Common stock issued for services		-			-			300,000
Stock options and warrants		477,356			588,857			2,567,452
(Increase) decrease in assets
Grants receivable		(244,479	)		-			(244,479	)
Prepaid drug product for testing		520,040			(315,640	)		(88,400	)
Other current assets		1,304			8,475			(72,993	)
Increase (decrease) in liabilities
Accounts payable and accrued expenses		(18,145	)		(62,381	)		246,757

Net cash used in operating activities		(1,148,156	)		(1,567,446	)		(3,897,311	)

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of exclusive license		(229,655	)		(110,000	)		(689,654	)

Net cash used in investing activities		(229,655	)		(110,000	)		(689,654	)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from convertible notes		-			-			435,000
Cash repayment of convertible notes		-			-			(15,000	)
Net proceeds from sale of common stock		1,049,127			737,624			4,405,530

Net cash from financing activities		1,049,127			737,624			4,825,530

NET INCREASE (DECREASE) IN CASH		(328,684	)		(939,822	)		238,565

Cash, beginning of period		567,249			1,507,071			-

Cash, end of period	$	238,565		$	567,249		$	238,565

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for
Interest	$	44		$	401		$	445
Income taxes	$	-		$	-		$	-

Non-cash financing activities
Common stock issued upon conversion of convertible notes	$	-		$	-		$	420,000
Common stock issued to Placement Agent	$	117,300		$	16,500		$	412,145
Common stock issued to M.D. Anderson for technology license	$	-		$	-		$	2,354,167

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

F-5

BIO-PATH HOLDINGS, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

Additional
Additional Paid in Capital
Common Stock Paid in Shares to be Accumulated
Date Description Shares Amount Capital Issued Deficit Total
May-07 Common stock issued for cash 6,480,994 $ 6,481 $ - $ - $ - $ 6,481
Jun-07 Common stock issued for cash 25,000 25 25
2nd Quarter fund raising expense (26,773 ) (26,773 )
Net loss 2nd Quarter 2007 (56,210 ) (56,210 )
Balances at June 30, 2007 6,505,994 $ 6,506 $ (26,773 ) $ - $ (56,210 ) $ (76,477 )
Aug-07 Common stock issued for cash in seed round 3,975,000 3,975 989,775 993,750
Aug-07 Common stock issued for cash in second round 1,333,334 1,333 998,667 1,000,000
Aug-07 Common stock issued to Placement Agent for services 530,833 531 198,844 199,375
3rd Quarter fund raising expense (441,887 ) (441,887 )
Net loss 3rd Quarter 2007 (81,986 ) (81,986 )
Balances at September 30, 2007 12,345,161 $ 12,345 $ 1,718,626 $ - $ (138,196 ) $ 1,592,775
Nov-07 Common stock issued MD Anderson for License 3,138,889 3,139 2,351,028 2,354,167
4th Quarter fund raising expense (60,506 ) (60,506 )
Net loss 4th Quarter 2007 (143,201 ) (143,201 )
Balances at December 31, 2007 15,484,050 $ 15,484 $ 4,009,148 $ - $ (281,397 ) $ 3,743,235
Feb-08 Common stock issued for cash in 3rd round 1,579,400 1,579 1,577,821 1,579,400
Feb-08 Common stock issued to Placement Agent 78,970 79 78,891 78,970
Feb-08 Common stock issued for services 80,000 80 79,920 80,000
Feb-08 Merger with 2.20779528 : 1 exchange ratio 20,801,158 20,801 (20,801 ) -
Feb-08 Add merger partner Odgen Golf shareholders 3,600,000 3,600 (3,600 ) -
1st Quarter fund raising expense (251,902 ) (251,902 )
Net loss 1st Quarter 2008 (226,206 ) (226,206 )
Balances at March 31, 2008 41,623,578 $ 41,623 $ 5,469,477 $ - $ (507,603 ) $ 5,003,497
Apr-08 Common stock issued to PCS, Inc. in connection with merger 200,000 200 179,800 180,000
Apr-08 Stock option awards 42,216 42,216
Apr-08 Warrants issued for services 36,050 36,050
Apr-08 Share rounding 24 -
2nd Quarter fund raising expense (6,243 ) (6,243 )
Net loss 2nd Quarter 2008 (496,256 ) (496,256 )
Balances at June 30, 2008 41,823,602 $ 41,823 $ 5,721,300 $ - $ (1,003,859 ) $ 4,759,264
Stock option vesting 30,770 30,770
3rd Quarter fund raising expense (12,886 ) (12,886 )
Net loss 3rd Quarter 2008 (239,049 ) (239,049 )
Balances at September 30, 2008 41,823,602 $ 41,823 $ 5,739,184 $ - $ (1,242,908 ) $ 4,538,099
Common stock issued for services 100,000 100 39,900 40,000
Stock option vesting 1,392,202 1,392,202
4th Quarter fund raising expense (19,025 ) (19,025 )
Net loss 4th Quarter 2008 (1,891,256 ) (1,891,256 )
Balances at December 31, 2008 41,923,602 $ 41,923 $ 7,152,261 $ - $ (3,134,164 ) $ 4,060,020
Stock option vesting 148,727 148,727
1st Quarter fund raising expense (4,069 ) (4,069 )
Net loss 1st Quarter 2009 (596,694 ) (596,694 )
Balances at March 31, 2009 41,923,602 $ 41,923 $ 7,296,919 $ - $ (3,730,858 ) $ 3,607,984
Jun-09 Common stock and warrants for cash 4th round 660,000 660 164,340 165,000
Jun-09 Common stock issued to Placement Agent 66,000 66 16,434 16,500
Stock option vesting 150,156 150,156
2nd Quarter fund raising expense (34,841 ) (34,841 )
Net loss 2nd Quarter 2009 (533,049 ) (533,049 )
Balances at June 30, 2009 42,649,602 $ 42,649 $ 7,593,008 $ - $ (4,263,907 ) $ 3,371,750
Stock option vesting 147,685 147,685
3rd Quarter fund raising expense (4,891 ) (4,891 )
Net loss 3rd Quarter 2009 (407,200 ) (407,200 )
Balances at September 30, 2009 42,649,602 $ 42,649 $ 7,735,802 $ - $ (4,671,107 ) $ 3,107,344
Common stock sold shares to be issued 675,000 675,000
Stock option vesting 142,288 142,288
4th Quarter fund raising expense (75,074 ) (75,074 )
Net loss 4th Quarter 2009 (432,795 ) (432,795 )
Balances at December 31, 2009 42,649,602 $ 42,649 $ 7,803,016 $ 675,000 $ (5,103,902 ) $ 3,416,763
BIO-PATH HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

~~SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS~~

									Additional
						Additional			Paid in Captial
		Common Stock				Paid in			Shares to be			Accumulated
Date	Description	Shares		Amount		Capital			Issued			Deficit			Total

May-07	Common stock issued for cash		6,480,994	$	6,481	$	-		$	-		$	-		$	6,481
Jun-07	Common stock issued for cash		25,000		25											25
	2nd Quarter fund raising expense						(26,773	)								(26,773	)
	Net loss 2nd Quarter 2007												(56,210	)		(56,210	)
Balances at June 30, 2007			6,505,994	$	6,506	$	(26,773	)	$	-		$	(56,210	)	$	(76,477	)

Aug-07	Common stock issued for cash in seed round		3,975,000		3,975		989,775									993,750
Aug-07	Common stock issued for cash in second round		1,333,334		1,333		998,667									1,000,000
Aug-07	Common stock issued to Placement Agent for services		530,833		531		198,844									199,375
	3rd Quarter fund raising expense						(441,887	)								(441,887	)
	Net loss 3rd Quarter 2007												(81,986	)		(81,986	)
Balances at September 30, 2007			12,345,161	$	12,345	$	1,718,626		$	-		$	(138,196	)	$	1,592,775

Nov-07	Common stock issued MD Anderson for License		3,138,889		3,139		2,351,028									2,354,167
	4th Quarter fund raising expense						(60,506	)								(60,506	)
	Net loss 4th Quarter 2007												(143,201	)		(143,201	)
Balances at December 31, 2007			15,484,050	$	15,484	$	4,009,148		$	-		$	(281,397	)	$	3,743,235

Feb-08	Common stock issued for cash in 3rd round		1,579,400		1,579		1,577,821									1,579,400
Feb-08	Common stock issued to Placement Agent		78,970		79		78,891									78,970
Feb-08	Common stock issued for services		80,000		80		79,920									80,000
Feb-08	Merger with 2.20779528 : 1 exchange ratio		20,801,158		20,801		(20,801	)								-
Feb-08	Add merger partner Odgen Golf shareholders		3,600,000		3,600		(3,600	)								-
	1st Quarter fund raising expense						(251,902	)								(251,902	)
	Net loss 1st Quarter 2008												(226,206	)		(226,206	)
Balances at March 31, 2008			41,623,578	$	41,623	$	5,469,477		$	-		$	(507,603	)	$	5,003,497

Apr-08	Common stock issued to PCS, Inc. in connection with merger		200,000		200		179,800									180,000
Apr-08	Stock option awards						42,216									42,216
Apr-08	Warrants issued for services						36,050									36,050
Apr-08	Share rounding		24													-
	2nd Quarter fund raising expense						(6,243	)								(6,243	)
	Net loss 2nd Quarter 2008												(496,256	)		(496,256	)
Balances at June 30, 2008			41,823,602	$	41,823	$	5,721,300		$	-		$	(1,003,859	)	$	4,759,264

	Stock option vesting						30,770									30,770
	3rd Quarter fund raising expense						(12,886	)								(12,886	)
	Net loss 3rd Quarter 2008												(239,049	)		(239,049	)
Balances at September 30, 2008			41,823,602	$	41,823	$	5,739,184		$	-		$	(1,242,908	)	$	4,538,099

	Common stock issued for services		100,000		100		39,900									40,000
	Stock option vesting						1,392,202									1,392,202
	4th Quarter fund raising expense						(19,025	)								(19,025	)
	Net loss 4th Quarter 2008												(1,891,256	)		(1,891,256	)
Balances at December 31, 2008			41,923,602	$	41,923	$	7,152,261		$	-		$	(3,134,164	)	$	4,060,020

	Stock option vesting						148,727									148,727
	1st Quarter fund raising expense						(4,069	)								(4,069	)
	Net loss 1st Quarter 2009												(596,694	)		(596,694	)
Balances at March 31, 2009			41,923,602	$	41,923	$	7,296,919		$	-		$	(3,730,858	)	$	3,607,984

Jun-09	Common stock and warrants for cash 4th round		660,000		660		164,340									165,000
Jun-09	Common stock issued to Placement Agent		66,000		66		16,434									16,500
	Stock option vesting						150,156									150,156
	2nd Quarter fund raising expense						(34,841	)								(34,841	)
	Net loss 2nd Quarter 2009												(533,049	)		(533,049	)
Balances at June 30, 2009			42,649,602	$	42,649	$	7,593,008		$	-		$	(4,263,907	)	$	3,371,750

	Stock option vesting						147,685									147,685
	3rd Quarter fund raising expense						(4,891	)								(4,891	)
	Net loss 3rd Quarter 2009												(407,200	)		(407,200	)
Balances at September 30, 2009			42,649,602	$	42,649	$	7,735,802		$	-		$	(4,671,107	)	$	3,107,344

	Common stock sold shares to be issued									675,000						675,000
	Stock option vesting						142,288									142,288
	4th Quarter fund raising expense						(75,074	)								(75,074	)
	Net loss 4th Quarter 2009												(432,795	)		(432,795	)
Balances at December 31, 2009			42,649,602	$	42,649	$	7,803,016		$	675,000		$	(5,103,902	)	$	3,416,763

Jan-10	Shares issued for common stock sold 4Q09		2,700,000		2,700		672,300			(675,000	)					-
Jan-10	Common stock and warrants for cash		900,000		900		224,100									225,000
Jan-10	Common stock issued to Placement Agent		360,000		360		89,640									90,000
May-10	Common stock and warrants for cash		780,000		780		272,220									273,000
May-10	Common stock issued to Placement Agent		78,000		78		27,222									27,300
Jun-10	Due diligence shares issued to Lincoln		12,000		12		4,188									4,200
Jun-10	Common stock and warrants for cash Lincoln		571,429		572		199,428									200,000
Jun-10	Commitment shares issued to Lincoln		566,801		567		197,813									198,380
Jul-10	Common stock for cash Lincoln		375,000		375		149,625									150,000
Jul-10	Commitment shares issued to Lincoln		6,251		7		2,493									2,500
Sep-10	Common stock for cash Lincoln		125,000		125		49,875									50,000
Sep-10	Commitment shares issued to Lincoln		2,084		2		832									834
Oct-10	Common stock for cash Lincoln		135,135		135		49,865									50,000
Oct-10	Commitment Shares issued to Lincoln		2,084		2		769									771
Nov-10	Common stock for cash Lincoln		135,135		135		49,865									50,000
Nov-10	Commitment Shares issued to Lincoln		2,084		2		769									771
Dec-10	Common stock sold shares to be issued									278,600						278,600
Dec-10	Full year 2010 stock option expense						477,356									477,356
Dec-10	Full year 2010 fund raising expense						(552,229	)								(552,229	)
Dec-10	Full year 2010 Net Loss												(2,081,500	)		(2,081,500	)
Balances at December 31, 2010			49,400,605	$	49,401	$	9,719,147		$	278,600		$	(7,185,402	)	$	2,861,746

F-6

Bio-Path Holdings, Inc.

(A Development Stage Company)

Notes to Financial Statements

December 31, ~~2009~~2010

1. ~~Organization and Business~~

1.	Organization and Business

Bio-Path Holdings, Inc. (“Bio-Path” or the “Company”) is a development stage company with its lead cancer drug candidate, Liposomal Grb-2 (L-Grb-2 or BP-100-1.01), currently in clinical trials. The Company was founded with technology from The University of Texas, ~~M. D.~~MD Anderson Cancer Center (“~~M. D.~~MD Anderson”) dedicated to developing novel cancer drugs under an exclusive license arrangement. The Company has drug delivery platform technology with composition of matter intellectual property that enables systemic delivery of antisense and small interfering RNA (“siRNA”) ~~and small molecules for treatment of cancer.~~. Bio-Path ~~recently~~has also licensed ~~new~~ liposome tumor targeting technology, which has the potential to be applied to augment the Company’s current delivery technology to improve further the effectiveness of its antisense and siRNA drugs under development as well as future liposome-based delivery technology ~~drugs in the future.~~drugs. In addition to its existing technology under license, the Company expects to ~~have~~maintain a close working relationship with key members of the ~~M. D. Anderson’s~~MD Anderson staff, which ~~should~~has the potential to provide Bio-Path with a strong pipeline of promising drug candidates in the future. Bio-Path expects the ~~program~~working relationship with ~~M. D.~~MD Anderson to ~~enable~~provide the opportunity for the Company to broaden its technology to include cancer drugs other than antisense and siRNA.

Bio-Path believes that its core technology, if successful, will enable it to be at the center of emerging genetic and molecular target-based therapeutics that require systemic delivery of DNA and RNA-like material. The Company’s two lead liposomal antisense drug candidates treat acute myeloid leukemia, chronic myelogenous leukemia, acute lymphoblastic leukemia and follicular lymphoma, and if successful, could potentially be used in treating many other indications of cancer. ~~These~~

Bio-Path is currently treating patients with its lead cancer drug candidate Liposomal Grb-2 (L-Grb-2 or BP-100-1.01) in a Phase I clinical trial. In March of 2010, Bio-Path received written notification from the U. S. Food and Drug Administration (the “FDA”) that its application for Investigational New Drug (“IND”) status for L-Grb-2 had been granted. This enabled the Company to commence its Phase I clinical trial to study L-Grb-2 in human patients, which began in the third Quarter 2010. During the third and fourth quarters of 2010, five patients started treatment in the Phase I clinical trial. The Principal Investigator at MD Anderson is actively evaluating new patient candidates for the clinical trial. The Company expects the Phase I clinical trial to last approximately another twelve months, primarily depending on the rate of enrollment of patients into the trial. The second of the Company’s two lead drug candidates will be ready for a clinical ~~trials~~trial after receiving an ~~investigational new drug (“IND”) status~~IND from the FDA.

The Company has filed an IND application for its lead drug candidate liposomal Grb-2 (BP-100-1.01) and received notice from the FDA subsequent to December 31, 2009 that the IND has been allowed for c ommencement of a Phase I clinical trial is a dose-escalating study to determine the safety and tolerance of escalating doses of L-Grb-2. The study will also determine the optimal biologically active dose for further development. The pharmacokinetics of L-Grb-2 in patients will be studied, making it possible to investigate whether the delivery technology performs as expected based on pre-clinical studies in animals. The trial will evaluate five doses of L-Grb-2 and 18 to 30 patients may be accrued into the study. The clinical trial is being conducted at The University of Texas MD Anderson Cancer Center.

An important outcome for the Phase I clinical trial is the ability to assess for the first time the performance of the Company’s delivery technology platform in human patients. Being platform technology, a successful demonstration of the delivery technology in this ~~drug.~~study will allow the Company to immediately begin expanding Bio-Path’s drug candidates by simply applying the delivery technology template to multiple new drug product targets. In this manner, Bio-Path can quickly build an attractive drug product pipeline with multiple drug product candidates for treating cancer as well as treating other important diseases including diabetes, cardiovascular conditions and neuromuscular disorders.

F-7

The Company was founded in May of 2007 as a Utah corporation. In February of 2008, Bio-Path completed a reverse merger with Ogden Golf Co. Corporation, a public company traded over the counter that had no current operations. The name of Ogden Golf was changed to Bio-Path Holdings, Inc. and the directors and officers of Bio-Path, Inc. became the directors and officers of Bio-Path Holdings, Inc. Bio-Path has become a publicly traded company (symbol OTCBB: BPTH) as a result of this merger. The Company’s operations to date have been limited to organizing and staffing the Company, acquiring, developing and securing its technology and undertaking product development for a limited number of product candidates including readying and now conducting a Phase I clinical trial in its lead drug product candidate ~~BP-100-1.01 for a Phase I cl inical trial.~~BP-100-1.01.

Bio-Path raised an additional $675,000 of funds for operations in the fourth quarter of 2009 through a private placement sale of shares of the Company’s common stock and associated warrants. The private placement offering remained open atAt the end of the year 2010, Bio-Path had $483,044 in cash and ~~subsequent~~grants receivable on hand. This amount is comprised of $238,565 in cash in Company checking and savings accounts, and a $244,479 grant receivable from the U. S. Government. The grant receivable represents a grant award Bio-Path received for its application to ~~December 31, 2009,~~receive grant funding from the U.S. Government’s Qualifying Therapeutic Discovery Project Program. The Company ~~raised an additional $225,000~~received these grant funds during the first week of February 2011. The Company is also currently raising up to $2 million through the sale of shares of ~~the Company’s~~its common stock through a Private Placement Memorandum. Approximately $1.4 million has been sold and/or committed as of mid-March 2011, and ~~associated warrants (see Footnote 13.). Subsequent~~approximately $1,050,000 of this amount was collected into Company accounts with the balance in escrow as of March 31, 2010. The Company will close the Private Placement at the end of March 2011. The Company also entered into an Equity Purchase Agreement with Lincoln Park Capital Fund, LLC in the second quarter of 2010. Since entering into this agreement, the Company has sold Lincoln Park Capital Fund $500,000 of its common stock during the year 2010. The amount of capital currently being raised as well as the grant funds received should be more than sufficient to ~~December 31, 2009,~~fund Bio-Path’s operations into the ~~IND was granted for Bio-Path’s drug candidate BP-100-1.01, and Management believes there will be~~Summer of 2011, when the Company should have sufficient ~~liquidity to commence the~~preliminary data from its Phase I clinical trial ~~in BP-100-1.01~~to start early assessments of the utility of the drug and ~~continue testing into~~ the ~~summer of 2010.~~delivery technology. The Company ~~will need~~plans to ~~raise~~begin raising significant amounts of additional development capital ~~to continue beyond in 2010 to complete this clinical tr ial. The Company’s strategy has been to minimize the amount of funds raised~~ at ~~the current lower, pre-Phase I trial~~anticipated higher share prices ~~to avoid excessive dilution and raise larger amounts~~once there is demonstration of ~~new capital with anticipated higher valuation~~proof-of-concept of ~~the Company’s common stock after commencement of the Phase I trial when the Company’s~~Bio-Path’s technology ~~is expected to be further validated.~~

in human patients.

~~F-7~~

As the Company has not begun its planned principal operations of commercializing a product candidate, the accompanying financial statements have been prepared in accordance with principles established for development stage enterprises.

2. ~~Summary of Significant Accounting Policies~~

2.	Summary of Significant Accounting Policies

Principles of Consolidation -- The consolidated financial statements include the accounts of Bio-Path Holdings, Inc., and its wholly-owned subsidiary Bio-Path, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents -- The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Concentration of Credit Risk -- Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash. The Company maintains its cash balances with one major commercial bank, JPMorgan Chase Bank. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. As a result, ~~$317,249~~as of December 31, 2010, all of the Company’s cash balances ~~is not~~were covered by the FDIC.

Intangible Assets/Impairment of Long-Lived Assets -- As of December 31, ~~2009,~~2010, Other Assets totals ~~$2,431,680~~$2,464,067 for the Company’s ~~three~~two technology licenses, comprised of ~~$2,814,166~~$3,043,821 in value acquiring the Company’s technology licenses and its intellectual property, less accumulated amortization of ~~$382,486.~~$579,754. The technology value consists of ~~$460,000~~$689,654 in cash paid or accrued to be paid to MD Anderson, plus 3,138,889 shares of common stock granted to MD Anderson valued at ~~$2,354,166.~~$2,354,167. This value is being amortized over a fifteen year (15 year) period from November 7, 2007, the date that the technology licenses became effective. As of December 31, ~~2009~~2010 accrued payments to be made to M. D. Anderson totaled ~~$125,000,~~$74,217, and such ~~pa yments~~payments are expected to be made in ~~2010.~~2011. The Company accounts for the impairment and disposition of its long-lived assets in accordance with generally accepted accounting principles (GAAP). Long-lived assets are reviewed for events of changes in circumstances which indicate that their carrying value may not be recoverable. The Company estimates that approximately ~~$190,000~~$200,000 will be amortized per year for each future year for the current value of the technology licenses acquired until approximately 2022.

F-8

Research and Development Costs -- Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with ~~GAAP~~GAAP. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future R&D activities are deferred and capitalized. Such amounts will be recognized as an expense as the related goods are delivered or the related services are performed. If the goods will not be delivered, or services will not be rendered, then the capitalized advance payment is charged to expense. For the year ~~2009,~~2010, the Company had ~~$480,255~~$1,144,189 of costs classified as research and development expense. Of this amount, $197,268 was for amortization of the technology license, $666,730 was for drug product material expensed and the balance of approximately $280,000 is comprised of ~~raw materials and~~ costs for ~~the Company’s raw material suppliers~~clinical trial expenses and ~~contract drug manufacturer to perform unplanned additional engineering test runs of the Company’s lead~~hospital costs, drug product ~~in advance of manufacturing a current Good Manufacturing Practice (cGMP) clinical batch of this drug for use in an upcoming Phase I Clinical Trial.~~testing, advisory services and other R&D activities.

Stock-Based Compensation -- The Company has accounted for stock-based compensation under the provisions of ~~GAAP requires~~GAAP. The provisions require us to record an expense associated with the fair value of stock-based compensation. We currently use the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate.

~~F-8~~

Net Loss Per Share – In accordance with GAAP and SEC Staff Accounting Bulletin (“SAB”) No. 98, basic net loss per common share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Although there were warrants and stock options outstanding during ~~2008,~~2010, under GAAP, no potential common shares shall be included in the computation of any diluted per-share amount when a loss from continuing operations exists. Consequently, diluted net loss per share is not presented in the financial statements for the ~~year~~years 2010 and 2009. The calculation of Basic and Diluted earnings per share for 2010 did not include 2,671,772 shares and 5,697,049 shares issuable pursuant to the exercise of vested common stock and vested warrants, respectively, as of December 31, 2010 as the effect would be anti-dilutive. The calculation of Basic and Diluted earnings per share for 2009 did not include 1,985,937 shares and 745,620 shares issuable pursuant to the exercise of ~~ve sted~~vested common stock and vested warrants, respectively, as of December 31, 2009 as the effect would be anti-dilutive. Further, the calculation of Basic and Diluted earnings per share for 2009 did not include 2,700,000 shares that are to be issued subsequent to December 31, 2009 relating to private placement proceeds received prior to that date, nor did it include the 270,000 shares to be issued to the placement agent once these shares are issued. The calculation of Basic and Diluted earnings per share for 2008 did not include 1,250,000 shares and 85,620 shares issuable pursuant to the exercise of vested common stock and vested warrants, respectively, as of December 31, 2008 as the effect would be anti-dilutive.

Comprehensive Income -- Comprehensive income (loss) is defined as all changes in a company’s net assets, except changes resulting from transactions with shareholders. At December 31, ~~2009 and 2008,~~2010, the Company has no reportable differences between net loss and comprehensive loss.

Use of Estimates -- The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that the Company believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from the Company’s estimates.

Income Taxes -- Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

F-9

New Accounting Pronouncements -- In ~~June 2009,~~January 2010, the ~~FASB~~Financial Accounting Standards Board (FASB) issued ~~FASB ASC 860-10-05 (Prior authoritative literature:~~ ~~FASB Statement 166,~~ ~~Accounting~~amended standards that require additional fair value disclosures. These amended standards require disclosures about inputs and valuation techniques used to measure fair value, as well as disclosures about significant transfers, beginning in the first quarter of 2010. This amendment did not have an impact on our financial statements. Additionally, these amended standards require presentation of disaggregated activity within the reconciliation for ~~Transfers~~fair value measurements using significant unobservable inputs (Level 3), beginning in the first quarter of ~~Financial Assets). This Statement removes~~2011. These additional requirements are not expected to have a material impact on the ~~concept of a qualifying special-purpose entity from Statement 140 and removes the exception from applying FASB Interpretation No. 46 (revised December 2003),~~ ~~Consolidation of Variable Interest Entities,~~ to qualifying special-purpose entities. FASB ASC 860-10-05 is effective for fiscal years beginning after November 15, 2009. The Company is currently assessing the impact of FASB ASC 860-10 - -05 on its financial ~~position and results of operations.~~

~~F-9~~

~~The first change relates~~separate deliverables and how to ~~the determination of when the individual deliverables included in a multiple-element~~measure and allocate arrangement ~~may be treated as separate~~consideration to one or more units of accounting. ~~This change~~The amendments in this guidance will ~~result in~~affect the ~~requirement to separate more deliverables~~accounting and reporting for all vendors that enter into multiple-deliverable arrangements with their customers when those arrangements are within ~~an arrangement, ultimately leading to less revenue deferral. The second change modifies~~ the manner in which the transaction consideration is allocated across the separately identified deliverables. Together, these changes will result in earlier recognition of revenue and related costs for multiple-element arrangements than under previous guidance. This guidance expands the disclosures required for multiple-element revenue arrangements. Effective for interim and annual reporting periods beginning after December 15, 2009. Th e Company is currently evaluating the potential impact, if any,scope of this ~~guidance~~Subtopic. This Statement is effective for fiscal years beginning on ~~its~~or after June 15, 2010. Earlier adoption is permitted. If a vendor elects early adoption and the period of adoption is not the beginning of the entity’s fiscal year, the entity will apply the amendments under this Subtopic retrospectively from the beginning of the entity’s fiscal year. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. Currently, Management believes this Statement will have no impact on the financial ~~statements.~~statements of the Company once adopted.

3. ~~Restricted Cash~~Grants Receivable

As of December 31, ~~2007,~~2010, Current Assets included ~~$208,144~~grants receivable of ~~restricted cash.~~$244,479. This ~~represented~~represents a grant award that Bio-Path received in October 2010 for its application to receive grant funding from the U.S. Government’s Qualifying Therapeutic Discovery Project Program. The Company received these grant funds ~~deposited in an escrow account pursuant to an ongoing placement memorandum for~~during the ~~sale~~first week of the Company’s common stock. Since the conditions of the offering required that a minimum of $500,000 of common stock be sold to enable closing of the round and release of the funds to the Company, the $208,144 was classified as a Current Liability on the December 31, 2007 Balance Sheet. Subsequently, in February ~~of 2008 these funds were released to the Company when the private placement sales of common stock exceeded the $500,000 minimum.~~2011.

4. Prepaid Drug Product for Testing

Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future R&D activities are deferred and capitalized. Such amounts will be recognized as an expense as the related goods are delivered or the related services are performed. The Company has paid installments to its contract drug manufacturing and raw material suppliers totaling ~~$292,800~~$88,400 during ~~2008 and $315,640 during 2009~~2010 pursuant to a Project Plan and Supply Agreement (see Note 11.) for the manufacture and delivery of the Company’s lead drug product for testing in a Phase I clinical trial. This amount is carried on the Balance Sheet as of December 31, ~~2009~~2010 at cost as Prepaid Drug Product for Testing and will be expensed aswhen the drug product is ~~used~~received by the Company in 2011. The amount of $608,440 carried on the balance sheet as of December 31, 2009 represented costs accumulated and capitalized for drug product that was delivered to the Company in 2010, and consequently, this amount was charged to research and development expense during the ~~Phase I clinical trial.~~year 2010.

5. Accounts Payable

As of December 31, ~~2009~~2010 and ~~2008,~~2009, Current Liabilities included accounts payable of ~~$6,453~~$88,400 and ~~$185,843,~~$6,453, respectively. These amounts were subsequently paid in the first quarter of each succeeding year.

6. Accrued Expense

As of December 31, ~~2009~~2010 and ~~2008,~~2009, Current Liabilities included accrued expense of $84,141 and $133,450, respectively. For December 31, 2010, this amount included bonus pool accrual of $23,125, accrued patient treatment costs of $16,300 to MD Anderson’s Leukemia Department, clinical operations CRO costs of $17,495 and ~~$16,442, respectively.~~other expense accruals totaling $27,221. For December 31, 2009, the bonus pool accrual comprised $92,500 of this amount and accrued expense for payments to the Company’s contract manufacturing supplier totaled $24,000.

F-10

7. Convertible Debt

~~The~~In 2007, the Company issued $435,000 in notes convertible into common stock at a rate of $.25 per common share. ~~As of December 31,~~In 2007, $15,000 of the convertible ~~notes had been~~were repaid in cash and $420,000 of the convertible notes ~~had been~~were converted into 1,680,000 shares of Bio-Path common stock and was included in the seed round completed in August of 2007. No interest was recorded because interest was nominal prior to conversion. No beneficial conversion feature existed as of the debt issuance date since the conversion rate was greater than or equal to the fair value of the common stock on the issuance date.

~~F-10~~

8. Accrued License Payments

Accrued license payments totaling $74,217 and $125,000 were included in Current Liabilities as of December 31, 2010 and 2009, ~~and 2008.~~respectively. These amounts represent patent expenses for the licensed technology expected to be invoiced from M. D. Anderson and maintenance fees needed to keep the licenses underlying patents in current good standing with the institution. It is expected that the accrued license payments will be made to M. D. Anderson in ~~2010.~~2011

9.	Stockholders’ Equity

~~9. Stockholder's Equity~~

Issuance of Common Stock – In May and June of 2007, the Company issued 6,505,994 shares of common stock for $6,506 in cash to founders of the Company. In August of 2007, the Company issued 3,975,000 shares of common stock for $993,750 in cash to investors in the Company pursuant to a private placement memorandum. In August of 2007 the Company issued an additional 1,333,334 shares of common stock for $1,000,000 in cash to investors in the Company pursuant to a second round of financing. The Company issued 530,833 in common stock to the Placement Agent as commission for the shares of common stock sold to investors. In November of 2007, the Company issued 3,138,889 shares in common stock to MD Anderson as partial ~~c onsideration~~consideration for its two technology licenses from MD Anderson.

In February of 2008, the Company completed a reverse merger with Ogden Golf Co. Corporation and issued 38,023,578 shares of common stock of the public company Bio-Path Holdings (formerly Ogden Golf Co. Corporation) in exchange for pre-merger common stock of Bio-Path, Inc. In addition, shareholders of Ogden Golf Co. Corporation retained 3,600,000 shares of common stock of Bio-Path Holdings. In February of 2008 Bio-Path issued 80,000 shares of common stock to strategic consultants pursuant to executed agreements and the fair value was expensed upfront as common stock for services. In April of 2008, the Company issued 200,000 shares of common stock to a firm in connection with introducing Bio-Path, Inc. to its merger partner Ogden Golf Co. Corporation. The fair value of this stock issuance was ~~e xpensed~~expensed upfront as common stock for services valued at $180,000. In April of 2008, the Company recorded an additional 24 shares for rounding in accordance with FINRA rules. In December of 2008, the Company issued 100,000 shares of common stock to an investor relations firm for services. The fair value of this stock issuance was expensed upfront as common stock for services valued at $40,000. There were no issuances of shares during the first quarter of 2009. In June of 2009, the Company issued 660,000 shares of common stock and warrants to purchase an additional 660,000 shares of common stock for $165,000 in cash to investors in the Company pursuant to a private placement memorandum. The warrants must be exercised within two years from the date of issuance. The exercise price of the warrants is $1.50 a share. In connection with this private placement, the Company issued 66,000 shares of common stock to the Placement Agent as ~~commiss ion~~commission for the shares of common stock sold to investors. There were no issuances of shares during the fourth quarter of 2009. As of December 31, 2009, there were 42,649,602 shares of common stock issued and outstanding. There are no preferred shares outstanding as of December 31, 2009.

F-11

In November and December of 2009, the Company sold shares of common stock and warrants to purchase shares of common stock for $675,000 in cash to investors pursuant to a private placement memorandum. These shares were not issued by the December 31, 2009 year end. However, when issued investors ~~will receive~~received 2,700,000 shares of common stock and warrants to purchase an additional 2,700,000 shares of common stock. The warrants must be exercised within two years from the date of issuance. The exercise price of the warrants is $1.50 a share. In connection with this private placement, the Company ~~will issue~~issued 270,000 shares of common stock to the Placement Agent as commission for the shares of common stock sold to investors.

In January 2010, the Company issued the above referenced investors 2,700,000 shares of common stock and the warrants to purchase an additional 2,700,000 shares of common stock. In January 2010, the Company also sold an additional 900,000 shares of common stock and warrants to purchase an additional 900,000 shares of common stock for $225,000 in cash to investors in the Company pursuant to a private placement memorandum. The warrants must be exercised within two years from the date of issuance and the exercise price is $1.50 a share. In connection with these private placement sales of equity, the Company issued 360,000 shares of common stock to the Placement Agent as commission for the shares of common stock sold to investors.

In May of 2010, the Company issued 780,000 shares of common stock and warrants to purchase an additional 780,000 shares of common stock for $273,000 in cash to investors in the Company pursuant to a private placement memorandum. The warrants must be exercised within two years from the date of issuance. The exercise price of the warrants is $1.50 a share. In connection with this private placement, the Company issued 78,000 shares of common stock to the Placement Agent as commission for the shares of common stock sold to investors.

In June of 2010, the Company signed an equity purchase agreement for up to $7 million with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based institutional investor. Under the terms of the equity purchase agreement, the Company has the right to sell shares of its common stock to LPC from time to time over a 24-month period in amounts between $50,000 and $1,000,000 up to an aggregate amount of $7 million depending upon certain conditions set forth in the purchase agreement including that a registration statement related to the transaction has been declared effective by the U.S. Securities and Exchange Commission (“SEC”). Upon signing the agreement, the Company received $200,000 from LPC as an initial purchase in exchange for 571,429 shares (“Initial Purchase Shares”) of the Company’s common stock and warrants to purchase 571,429 shares of the Company’s common stock at an exercise price of $1.50 per share. Subsequent purchases of the Company’s common stock by Lincoln Park under the agreement do not include warrants. In connection with the signing of the LPC financing agreement, the Company issued LPC 12,000 shares of the Company’s common stock for its due diligence efforts and 566,801 shares of the Company’s common stock as a commitment fee for the balance of the $7 million equity purchase commitment.

In July of 2010, the Company received $150,000 from LPC in exchange for 375,000 shares of the Company’s common stock. LPC was also issued 6,251 shares of the Company’s common stock as a commitment fee in connection with the purchase of the 375,000 shares of common stock. No warrants to purchase additional shares of common stock of the Company were issued to Lincoln in connection with the sale of the common stock.

In September of 2010, the Company received $50,000 from LPC in exchange for 125,000 shares of the Company’s common stock. LPC was also issued 2,084 shares of the Company’s common stock as a commitment fee in connection with the purchase of the 125,000 shares of common stock. No warrants to purchase additional shares of common stock of the Company were issued to Lincoln in connection with the sale of the common stock.

In October of 2010, the Company received $50,000 from LPC in exchange for 135,135 shares of the Company’s common stock. LPC was also issued 2,084 shares of the Company’s common stock as a commitment fee in connection with the purchase of the 135,135 shares of common stock. No warrants to purchase additional shares of common stock of the Company were issued to Lincoln in connection with the sale of the common stock.

~~F-11~~F-12

In November of 2010, the Company received $50,000 from LPC in exchange for 135,135 shares of the Company’s common stock. LPC was also issued 2,084 shares of the Company’s common stock as a commitment fee in connection with the purchase of the 135,135 shares of common stock. No warrants to purchase additional shares of common stock of the Company were issued to Lincoln in connection with the sale of the common stock.

In November and December of 2010, the Company sold shares of common stock for $278,600 in cash to investors pursuant to a private placement memorandum. These shares were not issued by the December 31, 2010 year end. However, when issued investors will receive 928,667 shares of common stock. In connection with this private placement, the Company will issue 92,867 shares of common stock to the Placement Agent as commission for the shares of common stock sold to investors.

10. Stock-Based Compensation Plans

The Plan - In 2007, the Company adopted the 2007 Stock Incentive Plan, as amended (the “Plan”). The Plan provides for the grant of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Performance Awards and other stock-based awards, or any combination of the foregoing to our key employees, non-employee directors and consultants. The total number of Shares reserved and available for grant and issuance pursuant to this Plan is 7,000,000 Shares, subject to the automatic annual Share increase as defined in the Plan. Under the Plan, the exercise price is determined by the compensation committee of the Board of Directors, and for options intended to qualify as ~~qua lified~~qualified incentive stock options, may not be less than the fair market value as determined by the closing stock price at the date of the grant. Each option and award shall vest and expire as determined by the compensation committee. Options expire no later than ten years from the date of grant. All grants provide for accelerated vesting if there is a change of control, as defined in the Plan.

There were no stock options or compensation-based warrants granted in the ~~year 2009 being reported on.~~years 2010 and 2009. Stock option and warrant awards granted for the year 2008 were estimated to have a weighted average fair value per share of $0.86. There were no stock options or warrants granted prior to 2008. The fair value calculation is based on stock options and warrants granted during the period using the Black-Scholes option-pricing model on the date of grant. In addition, for all stock options and warrants granted, exercise price was determined based on the fair market value as determined by the closing stock price at the date of the grant. For stock option and compensation-based warrants granted ~~for the year ended December 31,~~during 2008 the following weighted average assumptions were used in ~~d etermining~~determining fair value:

	2008
Risk-free interest rate	~~3.10%~~	3.10	%
Dividend yield	-%	-	%
Expected volatility	~~80%~~	80	%
Expected term in months		76

The Company determines the expected term of its stock option and warrant awards based on the numerical average of the length of the vesting period and the term of the exercise period. Expected volatility is determined by weighting the volatility of the Company’s historical stock price with the volatility of a group of peer group stock over the expected term of the grant, which method compensates for the limited trading history of the Company’s share price. The risk-free interest rate for the expected term of each option and warrant granted is based on the U.S. Treasury yield curve in effect at the time of grant.

Option activity under the Plan for the ~~year~~years ended December 31, ~~2009~~2010 and ~~2008,~~2009, was as follows:

					Weighted
			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Options		Price		Term		Value
					(In years)
Year Ended December 31, 2009
Outstanding at December 31, 2008		3,765,000	$	1.22		9.6	$	25,000
Granted		-
Exercised		-		-
Forfeited/expired		-		-
Outstanding at December 31, 2009		3,765,000	$	1.22		8.6	$	13,000
Vested and expected to vest December 31, 2009		1,985,937	$	1.34		8.7	$	4,130
Exercisable at December 31, 2009		31,771	$	0.30		7.9	$	4,130

~~F-12~~F-13

Weighted
Weighted- Average
Average Remaining Aggregate
Exercise Contractual Intrinsic
Options Price Term Value
(In years)
Year Ended December 31, 2008
Outstanding at December 31, 2007 - - - -
Granted 3,765,000 $ 1.22
Exercised - -
Forfeited/expired - -
Outstanding at December 31, 2008 3,765,000 $ 1.22 9.6 $ 25,000
Vested and expected to vest December 31, 2008 1,250,000 $ 1.40 9.8 -
Exercisable at December 31, 2008 - - - -

					Weighted									Weighted
			Weighted-		Average							Weighted-		Average
			Average		Remaining		Aggregate					Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic					Exercise		Contractual		Intrinsic
	Options		Price		Term		Value		Options			Price		Term		Value
					(In years)									(In years)
Year Ended December 31, 2009
Outstanding at December 31, 2008		3,765,000	$	1.22		9.6	$	25,000
Year Ended December 31, 2010
Outstanding at December 31, 2009										3,765,000		$	1.22		8.6	$	13,000
Granted		-								-
Exercised		-		-						-			-
Forfeited/expired		-		-						(477,812	)	$	0.85		5.2
Outstanding at December 31, 2009		3,765,000	$	1.22		8.6	$	13,000
Vested and expected to vest December 31, 2009		1,985,937	$	1.34		8.7	$	4,130
Exercisable at December 31, 2009		31,771	$	0.30		7.9	$	4,130

Outstanding at December 31, 2010										3,287,188		$	1.27		7.6	$	5,000
Vested and expected to vest December 31, 2010										2,671,772		$	1.30		7.7	$	2,839
Exercisable at December 31, 2010										56,771		$	0.30		7.3	$	2,839

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of ~~the year~~2010 and 2009 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, ~~2009.~~2010 or 2009, respectively. This amount changes based on the fair market value of the Company’s stock.

~~F-13~~

A summary of options outstanding and exercisable as of December 31, ~~2009:~~2010:

		Options Outstanding						Options Exercisable					Options Outstanding						Options Exercisable
				Weighted											Weighted
				Average		Weighted				Weighted					Average		Weighted				Weighted
Range of Exercise	Range of Exercise	Number		Remaining		Average		Number		Average		Range of Exercise	Number		Remaining		Average		Number		Average
Prices	Prices	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price		Prices	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price
				(Years)											(Years)

$	0.30		100,000		7.7	$	0.30		31,771	$	0.30	0.30		56,771		7.3	$	0.30		56,771	$	0.30
$	0.90		1,165,000		8.3	$	0.90		-		-	0.90		730,417		7.3	$	0.90		-		-
$	1.40		2,500,000		8.8	$	1.40		-		-	1.40		2,500,000		7.8	$	1.40		-		-
			3,765,000		8.6	$	1.22		31,771	$	0.30			3,287,188		7.6	$	1.27		56,771	$	0.30

Warrant activity under the Plan for the years ended December 31, ~~2009~~2010 and ~~2008,~~2009, was as follows:

					Weighted								Weighted
			Weighted-		Average						Weighted-		Average
			Average		Remaining		Aggregate				Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic				Exercise		Contractual		Intrinsic
	Warrants		Price		Term		Value		Warrants		Price		Term		Value
					(In years)								(In years)
Year Ended December 31, 2008
Outstanding at December 31, 2007		-		-		-		-
Year Ended December 31, 2009
Outstanding at December 31, 2008										85,620	$	0.90		3.9	$	-
Granted		85,620	$	0.90						-
Exercised		-		-						-
Forfeited/expired		-		-						-
Outstanding at December 31, 2008		85,620	$	0.90		4.9	$	-
Vested and expected to vest December 31, 2008		85,620	$	0.90		4.9	$	-
Exercisable at December 31, 2008		-		-		-		-
Outstanding at December 31, 2009										85,620	$	0.90		2.9	$	-
Vested and expected to vest December 31, 2009										85,620	$	0.90		2.9	$	-
Exercisable at December 31, 2009										-		-		-		-

Weighted
Weighted- Average
Average Remaining Aggregate
Exercise Contractual Intrinsic
Warrants Price Term Value
(In years)
Year Ended December 31, 2009
Outstanding at December 31, 2008 85,620 $ 0.90 4.9 $ -
Granted - -
Exercised - -
Forfeited/expired - -
Outstanding at December 31, 2009 85,620 $ 0.90 3.9 $ -
Vested and expected to vest December 31, 2009 85,620 $ 0.90 3.9 $ -
Exercisable at December 31, 2009 - - - -

F-14

					Weighted
			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Warrants		Price		Term		Value
					(In years)
Year Ended December 31, 2010
Outstanding at December 31, 2009		85,620	$	0.90		3.9	$	-
Granted		-
Exercised		-
Forfeited/expired		-
Outstanding at December 31, 2010		85,620	$	0.90		2.9	$	-
Vested and expected to vest December 31, 2010		85,620	$	0.90		2.9	$	-
Exercisable at December 31, 2010		-		-		-		-

A summary of ~~options~~warrants outstanding and exercisable as of December 31, ~~2009:~~2010:

		Options Outstanding						Options Exercisable					Options Outstanding						Warrants Exercisable
				Weighted											Weighted
				Average		Weighted				Weighted					Average		Weighted				Weighted
Range of Exercise	Range of Exercise	Number		Remaining		Average		Number		Average		Range of Exercise	Number		Remaining		Average		Number		Average
Prices	Prices	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price		Prices	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price
				(Years)											(Years)

$	0.90		85,620		3.9	$	0.90		-		-	0.90		85,620		2.9	$	0.90		-		-
			85,620		3.9	$	0.90		-		-			85,620		2.9	$	0.90		-		-

The amount of warrants exercisable shown in the above table do not include investor warrants to purchase 5,611,429 shares of common stock. The exercise price of the investor warrants is $1.50.

Stock Option Grants - In April of 2008 the Company made stock option grants for services over the next three years to purchase in the aggregate 1,165,000 shares of the Company’s common stock. Terms of the stock option grants require, among other things, that the individual continues to provide services over the vesting period of the option, which is four or five years from the date that each option granted to the individual becomes effective. The exercise price of the options is $0.90 a share. None of these stock options grants were for current management and officers of the Company. The Company determined the fair value of the stock options granted using the Black Scholes model and expenses this value monthly ~~b ased~~based upon the vesting schedule for each stock option award. For purposes of determining fair value, the Company used an average annual volatility of seventy two percent (72%), which was calculated based upon an average of volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted was determined using this methodology to be $761,590, which ~~will be~~is being expensed over the ~~next~~ six years following the date of grant based on the stock option service period.

In October of 2008 the Company made stock option grants to management and officers to purchase in the aggregate 2,500,000 shares of the Company’s common stock. Terms of the stock option grants require that the individuals continue employment with the Company over the vesting period of the option, fifty percent (50%) of which vested upon the date of the grant of the stock options and fifty percent (50%) of which will vest over 3 years from the date that the options were granted. The exercise price of the options is $1.40 a share. The Company determined the fair value of the stock options granted using the Black Scholes model and expenses this value monthly based upon the vesting schedule for each stock option award. For purposes of determining fair value, the Company used an average ~~annu al~~annual volatility of eighty four percent (84%), which was calculated based upon taking a weighted average of the volatility of the Company’s common stock and the volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted to management and officers was determined using this methodology to be $2,485,000, half of which was expensed at the date of grant and the balance ~~will be~~is being expensed over the ~~next~~ three years following the date of grant based on the stock option service period.

F-15

In December of 2008 the Company made stock option grants for services over the next three years to purchase in the aggregate 100,000 shares of the Company’s common stock. Terms of the stock option grants require, among other things, that the individual continues to provide services over the vesting period of the option, which is three or four years from the date that each option granted to the individual becomes effective. The exercise price of the options is $0.30 a share. None of these stock options grants were for current management and officers of the Company. The Company determined the fair value of the stock options granted using the Black Scholes model and expenses this value monthly based upon the vesting schedule for each stock option award. For purposes of ~~determini ng~~determining fair value, the Company used an average annual volatility of eighty four percent (84%), which was calculated based upon taking a weighted average of the volatility of the Company’s common stock and the volatility of similar biotechnology stocks. The risk free rate of interest used in the model was taken from a table of the market rate of interest for U. S. Government Securities for the date of the stock option awards and interpolated as necessary to match the appropriate effective term for the award. The total value of stock options granted was determined using this methodology to be $21,450, which ~~will be~~is being expensed over the ~~next~~ four years following the date of grant based on the stock option vesting schedule.

~~Total stock option expense for the year 2008 being reported on totaled $1,465,189.~~

There were no stock option awards granted in 2009. Total stock option expense for the year 2009 totaled $588,857.

There were no stock option awards in 2010. Total Stock option expense for the year 2010 being reported on totaled ~~$588,857.~~$477,356.

Warrant Grants - In April of 2008 the Company awarded warrants for services to purchase in the aggregate 85,620 shares of the Company’s common stock. The exercise price is $0.90 a share. The warrants were one hundred percent (100%) vested upon issuance and were expensed upfront as warrants for services. The fair value of the warrants expensed was determined using the same methodology as described above for stock options. The total value of the warrants granted was determined using this methodology to be $36,050, the total amount of which was expensed in the second quarter 2008.

There were no warrants for services granted in 2009 and there was no warrant expense for the year ~~2009 being reported on.~~2009. The warrants issued in connection with the sale of units of common stock in 2009 were for cash value received and as such were not grants of compensation-based warrants.

~~11.~~ There were no warrants for services granted in 2010 and there was no warrant expense for the year 2010 being reported on.

11.	Commitments and Contingencies

Technology License - The Company has negotiated exclusive licenses from M. D. Anderson to develop drug delivery technology for siRNA and antisense drug products and to develop liposome tumor targeting technology. These licenses require, among other things, the Company to reimburse M. D. Anderson for ongoing patent expense. Accrued license payments totaling ~~$125,000~~$74,217 are included in Current Liabilities as of December 31, ~~2009.~~2010. As of December 31, ~~2009,~~2010, the Company estimates reimbursable patent expenses will total approximately ~~$200,000.~~$200,000 over the foreseeable future. The Company will be required to pay when invoiced the patent expenses at the rate of $25,000 per quarter.

F-16

Drug Supplier Project Plan - In June of 2008, Bio-Path entered into a Project Plan agreement with a contract drug manufacturing ~~supplier~~suppler for delivery of drug product to support commencement of the Company’s Phase I clinical trial of its first cancer drug product. ~~The Company currently expects to start this trial~~Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future R&D activities are deferred and capitalized. Such amounts will be recognized as an expense as the related goods are delivered or the related services are performed. Previously in ~~2010. In~~2008 and 2009, the Company paid ~~$315,640~~$608,440 to this manufacturer and its drug substance raw material supplier ~~that is carried at cost~~and capitalized these costs on the balance sheet as Drug Product for ~~Testing~~Testing. During 2010, this drug product was delivered to the company and the amount capitalized on the balance sheet was expensed (see Note 4.2.). ~~The Company expects~~During 2010, a final lot of drug product to ~~pay~~be manufactured under the Project Plan was in process. Costs associated with this drug lot totaled $88,400 and were capitalized on the balance sheet as Prepaid Drug Product for Testing. These costs will be charged to R&D expense once the drug product is delivered to the Company. With the delivery of this final drug product project, the Project Plan will have been completed and no ~~more than $150,000~~additional monies beyond the $88,400 will be owed to ~~its contract~~the drug manufacturing supplier to complete payments under the current contract when the supplier delivers clinical grade drug product for testing in the Compa ny’s clinical trial. Future contracts will be required as the Company’s requirement for clinical drug product increases.supplier.

~~F-16~~

Additional Paid In Capital For Shares To Be Issued - In November and December of ~~2009,~~2010, the Company sold shares of common stock ~~and warrants to purchase shares of common stock~~ for ~~$675,000~~$278,600 in cash to investors pursuant to a private placement memorandum. These shares were not issued ~~as of~~by the December 31, ~~2009~~2010 year end. However, when issued investors will receive 928,667 shares of common stock. In connection with this private placement, the Company ~~is committed to issuing these investors 2,700,000~~will issue 92,867 shares of common stock ~~and warrants~~ to ~~purchase an additional 2,700,000~~the Placement Agent as commission for the shares of common ~~stock. The warrants must be exercised within two years from the date of issuance. The exercise price of the warrants is $1.50 a share.~~stock sold to investors.

Placement Agent Agreement – In the fourth quarter of ~~2009,~~2010, the Company entered into a Placement Agent Agreement to raise additional capital. Under the terms of this Agreement, the Company is required to pay cash and stock commissions to the Placement Agent for funds raised. As of December 31, ~~2009~~2010 the Company sold shares ~~and warrants~~ under this Agreement totaling ~~$675,000.~~$278,600. The Placement Agent was paid ~~$65,000 for~~a cash commission ~~leaving a remaining obligation~~ of ~~$2,500.~~$27,860 in December 2010. The ~~2,700,000~~928,667 shares purchased by investors had not been issued as of December 31, ~~2009,~~2010, however, when issued the Company is committed to issuing Placement Agent ~~270,000~~92,867 shares representing the stock commission.

~~12.~~ ~~Income Taxes~~

12.	Income Taxes

At December 31, ~~2009,~~2010, the Company has a net operating loss carryforward for Federal income tax purposes of ~~$3,009,065~~$4,612,067 which expires in varying amounts ~~through~~during the tax years 2028 and 2029. The Company recorded an increase in the valuation allowance of ~~$528,599~~$566,894 for the year ended December 31, ~~2009.~~2010.

The components of the Company’s deferred tax asset are as follows:

	December 31,						December 31,
	2009			2008			2010			2009
Net Operating Loss (NOL) Carryover	$	1,023,082		$	553,879		$	1,568,103		$	1,023,082
Share Based Expense		112,163			52,767			133,648			112,163
Total Deferred Tax Asset		1,135,245			606,646			1,701,751			1,135,245
Less: Valuation Allowance		(1,135,245	)		(606,646	)		(1,701,751	)		(1,135,245	)
Net Deferred Tax Asset	$	-		$	-		$	-		$	-

Reconciliation between income taxes at the statutory tax rate (34%) and the actual income tax provision for continuing operations follows:

	December 31,						December 31,
	2009			2008			2010			2009

Loss Before Income Taxes	$	(1,969,738	)	$	(2,852,767	)	$	(2,081,500	)	$	(1,969,738	)
Tax Benefit @ Statutory Tax Rate		669,711			969,941			707,710			669,711
Effects of:
Exclusion of ISO Expense		(140,816	)		(457,654	)		(140,816	)		(140,816	)
(Increase)/Decrease in Valuation Allowance		(528,599	)		(509,274	)		(566,894	)		(528,895	)
Other		(296	)		(3,013	)
Provision (Benefit) for Income Taxes	$	-		$	-		$	-		$	-

F-17

The Company adopted the provisions of Financial Accounting Standards, or FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109,” or FIN 48, on June 1, 2007. As of December 31, ~~2009~~2010 and ~~2008,~~2009, the Company has no unrecognized income tax benefits. The Company is in process of completing an analysis of its tax credit carryforwards. Any uncertain tax positions identified in the course of this analysis will not impact its financial statements due to the full valuation allowance. A reconciliation of our unrecognized tax benefits for the years ending December 31, ~~2009~~2010 and ~~2008~~2009 is presented in the table below:

	December 31,				December 31,
	2009		2008		2010		2009

Beginning balance	$	0.0	$	0.0	$	0.0	$	0.0
Additions based on tax positions related to current year		0.0		0.0		0.0		0.0
Reductions for tax positions of prior years		0.0		0.0		0.0		0.0
Reductions due to expiration of statute of limitations		0.0		0.0		0.0		0.0
Settlements with taxing authorities		0.0		0.0		0.0		0.0
Ending Balance	$	0.0	$	0.0	$	0.0	$	0.0

The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the years ended December 31, ~~2009,~~2010, and ~~2008.~~2009.

The tax years from 2007 and forward remain open to examination by federal and Texas authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.

13. Subsequent Events

In ~~November and December~~October of ~~2009,~~2010, the Company commenced raising $750,000 through the sale of shares of its common stock through a Private Placement Memorandum. Under the terms of the offering, shares of the Company’s common stock will be sold to investors at $0.30 a share. Share purchases by investors in this offering do not include warrants to purchase additional shares of common ~~stock~~stock. The Placement Agent for this offering will receive a cash commission of ten percent (10%) and ~~warrants to purchase shares~~issuance of one share of the Company’s common stock for ~~$675,000 in cash~~each share sold to ~~investors pursuant to a private placement memorandum. These shares were not issued as of the December 31, 2009 year end.~~investors. In the first quarter of ~~2010,~~2011, the Company ~~issued these investors 2,700,000 shares~~amended the Private Placement Memorandum to increase the maximum funds raised to $2 million. Approximately $1.4 million has been sold and/or committed and $1,050,000 of ~~common stock and warrants~~this amount was collected into Company accounts with the balance in escrow as of March 31, 2011. The Company expects to ~~purchase an additional 2,700,000 shares~~close the Private Placement at the end of common stock, completing the Company’s obligation to these investors. The warrants must be exercised within two years from the date of issuance. The exercise price of the warrants is $1.50 a share.March 2011.

In ~~January of 2010,~~February 2011, the Company ~~paid~~received $244,479 in grant funds from the ~~Placement Agent~~U. S. Government. This represents a grant award that Bio-Path received in October 2010 for its application to receive grant funding from the ~~balance~~U.S. Government’s Qualifying Therapeutic Discovery Project Program that was shown in grants receivable on the Balance Sheet as of $2,500 for cash commissions owed for the sale of common stock and warrant in the fourth quarter of 2009. In addition, the Company issued 270,000 shares of common stock to the Placement Agent representing stock commission on shares of common stock sold.December 31, 2010.

In January of 2009, the Company issued 900,000 shares of common stock and warrants to purchase an additional 900,000 shares of common stock for $225,000 in cash to an investor in the Company pursuant to a private placement memorandum. In connection with this private placement, the Company paid $22,500 in cash commissions and issued 90,000 shares of common stock to the Placement Agent as commission for the shares of common stock sold to investors.

F-18

~~In March~~Through the end of ~~2010,~~the first quarter of 2011, the Company ~~received written notification from the U. S. Food and Drug Administration (FDA) that it has allowed an IND (Investigational New Drug) for the Company’s~~had enrolled seven patients into its Phase I clinical trial of its lead cancer drug ~~candidate liposomal Grb-2 (BP-100-1.01)~~product Liposomal-Grb-2 (also “BP-100-1.01”). Two additional patients were in the process of being enrolled at the end of March 2011. Patients eligible for enrollment have refractory or relapsed Acute Myeloid Leukemia (AML), Philadelphia Chromosome Positive Chronic Myelogenous Leukemia (CML), or Acute Lymphoblastic Leukemia (ALL), and Myelodysplastic Syndrome (MDS) and who have failed other approved treatments. At the low initial dose levels in the clinical trial, it has taken longer than expected for the Principal Investigator to ~~proceed~~recruit patients into ~~clinical trials. The IND review process~~the trial. In addition, four of the initial patients were unable to stay on the entire four week treatment cycle because of progressive disease, which was ~~performed by~~unrelated to treatment with Liposomal-Grb-2, and consequently, had to be withdrawn from the ~~FDA’s Division~~study before completion of ~~Oncology Products and involved a comprehensive review~~testing. However, two of ~~data submitted by~~ the ~~Company covering pre-clinical studies, safety, chemistry, manufacturing and controls, and~~three patients that completed the full four week treatment cycle of the Phase I trial were placed on continuing treatment for additional cycles based on the Principal Investigator’s assessment that they were receiving benefit from the drug. Bio-Path’s approved protocol for the Phase I clinical ~~trial. The clinical~~ trial ~~will be conducted at~~provides that the ~~M. D. Anderson Cancer Center and~~Principal Investigator may continue treatment of a patient beyond the initial cycle if in the Principal Investigator’s opinion the patient is ~~expected to last one year. The primary objective~~exhibiting stable disease, or else, have improvement of their disease. In the circumstance where a patient is continuing treatment beyond the requirements of the Phase I trial, the Company is required to ~~demonstrate~~supply drug at no charge for the ~~safety~~continuing treatments but does not incur additional hospital costs. Finally, one patient developed mucositis (inflammation of the mucous membranes) during treatment and was withdrawn from the study as a DLT (dose limiting toxicity). This patient previously had hydroxyurea-related mucositis prior to enrolling in the clinical trial and it reappeared while on treatment. Patients in the clinical trial continue to receive hydroxyurea while being treated with Bio-Path’s drug. Although it is too early to draw any scientific conclusions about the effect that the Company’s drug candidate liposomal Grb-2 for use in human pati ents. Additional objectives are to demonstrate the effectiveness of the Company’s delivery technology similar to that experienced in pre-clinical treatment of animals, and further, to assess whether the drug candidate test article produces a favorable impactLiposomal-Grb-2 has on ~~the cancerous condition of the patient at the dose levels of the study. The clinical trial is structured to test five rounds of~~ patients ~~with each round comprising treatment of three patients. Each succeeding round~~being treated in the ~~study has a higher dose~~trial, the effects of ~~the drug candidate test article being administered~~apparent stabilization in some patients is expected to help in recruiting new patients to the ~~patients. The Company will reimburse M. D. Anderson at the rate of approximately $13,000 per patient for treating patients in the study.~~clinical trial. In ~~total,~~this regard, the Company ~~currently expects to reimburse M. D. Anderson approximately $250,000 spread out over one year for patient treatment costs. The Company is also required to supply~~was very encouraged by the drug candidate test article for administration to the pa tients in the study, for which the Company has in place a drug supply contract with Althea Technologies (see Note 11.) that will supply sufficient drug candidate test article for testing throughrecent new enrollment of two rounds. The Company expects to pay no more than $150,000 to its contract drug manufacturing supplier to complete payments under the current contract. Drug costs for the entire study could cost an additional $1 million including requirements for drug candidate test article for additional treatments of the patients if the drug is having a positive effect on the patients’ disease. The Company has sufficient cash resources to fund the trial through the initial two or three rounds of the study. The Company plans to raise additional cash resources through the sale of common stock in an offering planned for early summer of 2010. Commencement of the trial will begin in 2010 after completion of final preparations and enrollment ofnew patients into the ~~study.~~trial.

Projecting forward from this point to an anticipated end of the Phase I clinical trial, it is expected that an additional twelve months could be required to complete all testing. This assumes that patient recruitment improves to something near the projected rate for this clinical trial. Additional costs to completion of the Phase I clinical trial are estimated to range from $750,000 to $1.2 million. The number of additional patients required will be at least 13-16, and an additional cost factor is the number of patients that benefit from the treatment and are placed on continuing therapy beyond the requirements of the clinical trial. The Company believes it has sufficient resources and access to additional resources if needed to fund these operations.

F-19

	Utah		87-0652870
	(State or other jurisdiction of incorporation)		(I.R.S. employer identification No.)

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ýx

	Page

PART I	1

Item 1. Description of Business	2
~~Item 1A. Risk Factors~~	18

Item ~~2. Properties~~ 1A. Risk Factors	18

Item 1B. Unresolved Staff Comments	32

Item ~~3. Legal Proceedings~~ 2. Properties	32

Item ~~4. Submission of Matters to a Vote of Security Holders~~ 3. Legal Proceedings	32

~~PART II~~ Item 4. (Removed and Reserved)	32

PART II	33

Item 5. Market for the Registrant’s Common Stock and Related Security Holder Matters	3233

Item 6. Selected Consolidated Financial Data	34

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation	3534

I~~tem~~Item 7A. Quantitative and Qualitative Disclosures About Market Risk.	40

Item 8. Financial Statements and Supplementary Data	40

Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure	40

Item 9A. Controls and Procedures	40

Item 9B. Other Information	41

~~Item 9A. Controls and Procedures~~	41

~~Item 9B. Other Information~~ PART III	42

~~PART III~~ Item 10. Directors, Executive Officers and Corporate Governance	42

Item ~~10. Directors,~~11. Executive ~~Officers and Corporate Governance~~ Compensation	4244

~~Item 11. Executive Compensation~~	45

Item 12. Security Ownership of Certain Beneficial Owners and Management	4847

Item 13. Certain Relationships and Related Party Transactions	5049

Item 14. Principal Accountant Fees and Services	5049

Item 15. Exhibits	5150

	~~Licensor:~~	~~The Board of Regents of the University of Texas System on behalf of The University of Texas M.D. Anderson Cancer Center~~

	~~Licensee:~~	~~Bio-Path, Inc.~~

	~~License:~~	~~A royalty bearing, exclusive license to manufacture, use and sell the Licensed Products~~

	~~Territory:~~	~~Worldwide~~

	~~Retained Rights:~~	~~Certain research and academic rights are retained by Licensor~~

	~~License Fees:~~	Documentation Fee - $40,000 for the first license and $60,000 for the second license; annual maintenance fee - $25,000 for years 1, 2 & 3 increasing to $100,000 in the eighth year. After the first sale, increasing to $125,000

	~~Royalties:~~	~~Three percent of net sales~~

	~~Milestone Payments:~~	~~One-time payments range from $150,000 to $2,000,000. Total up to $8,150,000~~

	~~Securities Issuance:~~	~~1,883,333 shares of Bio-Path for first License and 1,255,556 shares for secondLicense~~

	~~Expense:~~	~~Bio-Path will reimburse M. D. Anderson for expenses~~

	~~Term:~~	~~Full term of patents~~

Phase:	Objective:	Estimated Duration:

Discovery	Lead identification and target validation	2 to 4 years
Preclinical	Initial toxicology for preliminary identification of risks for humans; gather early pharmacokinetic data	1 to 2 years
Phase I	Evaluate safety in humans; study how the drug candidate works, metabolizes, and interacts with other drugs	1 to 2 years
Phase II	Establish effectiveness of the drug candidate and its optimal dosage; continue safety evaluation	2 to 4 years
Phase III	Confirm efficacy, dosage regime, and safety profile of the drug candidate; submit NDA	2 to 4 years
FDA approval	Approval by the FDA to sell and market the drug for the approved indication	6 months to 2 years

	1)	That the actual costs of a particular trial will come within our budgeted amount.
	2)	That any trials will be successful or will result in drug commercialization opportunities.
	3)	That we will be able to raise the sufficient funds to allow us to operate for three years or to complete our trials.

	High Bid	Low Bid
Fiscal Year Ended December 31, 2008

First Fiscal Quarter	$ .90	$ .61
Second Fiscal Quarter	$ .90	$ .35
Third Fiscal Quarter	$ .50	$ .35
Fourth Fiscal Quarter	$1.65	$1.40

Plan Category	Number of Shares of common stock to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options	Weighted-average term to expiration of options outstanding	Number of shares of common stock remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders (1)	3,765,000	$1.22	8.6 yrs.	3,235,000
Equity compensation plans not approved by shareholders	---	---	---	---

BIO-PATH HOLDINGS, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 AND THE PERIOD
FROM INCEPTION (MAY 10, 2007) THROUGH DECEMBER 31, 2009

							From inception
							05/10/2007 to
	2009			2008			12/31/2009

CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(1,969,738	)	$	(2,852,767	)	$	(5,103,902	)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization		182,981			171,954			382,486
Common stock issued for services					300,000			300,000
Stock options and warrants		588,857			1,501,239			2,090,096
(Increase) decrease in assets
Restricted escrow cash					208,144
Drug product for testing		(315,640	)		(292,800	)		(608,440	)
Other current assets		8,475			(55,338	)		(74,298	)
Increase (decrease) in liabilities
Accounts payable and accrued expenses		(62,381	)		297,112			264,904
Escrow cash payable					(208,144	)
Net cash used in operating activities		(1,567,446	)		(930,600	)		(2,749,154	)

CASH FLOW FROM INVESTING ACTIVITIES
Purchase of exclusive license		(110,000	)		(150,000	)		(460,000	)
Net cash used in investing activities		(110,000	)		(150,000	)		(460,000	)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from convertible notes		-			-			435,000
Cash repayment of convertible notes		-			-			(15,000	)
Net proceeds from sale of common stock		737,624			1,368,313			3,356,403
Net cash from financing activities		737,624			1,368,313			3,776,403

NET INCREASE/(DECREASE) IN CASH		(939,822	)		287,713			567,249
Cash, beginning of period		1,507,071			1,219,358			-
Cash, end of period	$	567,249		$	1,507,071		$	567,249

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-
Non-cash financing activities
Common stock issued upon conversion of convertible notes							$	420,000
Common stock issued to Placement Agent				$	78,970		$	294,845
Common stock issued to M.D. Anderson for technology license							$	2,354,167