UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-50344

LPATH, INC.

(Name of small business issuer in its charter)

Nevada		16-1630142
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6335 Ferris Square, Suite A, San Diego, CA 92121

(Address of principal executive offices, including zip code)

(858) 678-0800

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

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

The number of shares of issuer’s outstanding Class A common stock as of August 14, 2008 was 52,128,819.

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LPATH, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	3

ITEM 1:	Financial Statements	3

ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7

ITEM 4:	Controls and Procedures	10

PART II	OTHER INFORMATION	11

ITEM 1:	Legal Proceedings	11

ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	11

ITEM 3:	Defaults upon Senior Securities	11

ITEM 4:	Submission of Matters to a Vote of Security Holders	11

ITEM 5:	Other Information	11

ITEM 6:	Exhibits	12

SIGNATURES		14

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PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

LPATH, INC.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2008			2007
	(Unaudited)			(See note)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,893,563		$	7,521,071
Accounts receivable	282,278			10,502
Prepaid expenses and other current assets	145,585			217,581
Total current assets	2,321,426			7,749,154

Equipment and leasehold improvements, net	353,335			422,484
Patents, net	486,033			442,706
Deposits and other assets	37,491			37,644

Total assets	$	3,198,285		$	8,651,988

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,297,320		$	989,069
Accrued expenses	349,244			572,798
Deferred rent, current portion	48,253			45,405
Leasehold improvement debt, current portion	14,681			14,107
Total current liabilities	1,709,498			1,621,379

Deferred rent, long-term portion	76,044			101,121
Leasehold improvement debt, long-term portion	22,908			30,395
Long-term accrued liabilities	562,058			563,865
Total liabilities	2,370,508			2,316,760

Stockholders’ Equity:
Common stock - $.001 par value; 100,000,000 shares authorized; 45,348,922 and 45,046,495 issued and outstanding at June 30, 2008 and December 31, 2007, respectively	45,349			45,046
Additional paid-in capital	36,461,408			34,457,999
Accumulated deficit	(35,678,980		)	(28,167,817		)
Total stockholders’ equity	827,777			6,335,228

Total liabilities and stockholders’ equity	$	3,198,285		$	8,651,988

Note: The balance sheet at December 31, 2007 has been derived from the audited consolidated financial statements at that date. See accompanying notes to the condensed consolidated financial statements.

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LPATH, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2008			2007			2008			2007

Grant and royalty revenue	$	474,714		$	349,920		$	461,588		$	152,939

Expenses:
Research and development	5,643,389			5,006,510			2,038,952			2,827,863
General and administrative	2,418,411			1,700,430			874,984			966,680
Total expenses	8,061,800			6,706,940			2,913,936			3,794,543

Loss from operations	(7,587,086		)	(6,357,020		)	(2,452,348		)	(3,641,604		)

Other income (expense):
Interest income	77,646			133,776			20,291			124,761
Interest expense	(1,723		)	(16,468		)	(925		)	(271		)
Total other income (expense)	75,923			117,308			19,366			124,490

Net loss	$	(7,511,163	)	$	(6,239,712	)	$	(2,432,982	)	$	(3,517,114	)

Basic and diluted net loss per share	$	(0.17	)	$	(0.19	)	$	(0.05	)	$	(0.09	)

Weighted average number of common shares outstanding used in the calculation	45,222,811			32,471,547			45,278,501			40,154,651

See accompanying notes to the condensed consolidated financial statements.

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LPATH, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
	2008			2007
Cash flows from operating activities:
Net loss	$	(7,511,163	)	$	(6,239,712	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	1,854,473			933,906
Depreciation and amortization	77,736			58,352
Deferred rent expense	(22,229		)	24,430
Changes in operating assets and liabilities:
Accounts receivable	(271,776		)	(34,578		)
Prepaid expenses and other current assets	71,996			67,725
Accounts payable and accrued expenses	67,113			1,057,607
Deposits and other assets	2,348			—
Net cash used in operating activities	(5,731,502		)	(4,132,270		)

Cash flows from investing activities:
Equipment expenditures	(3,112		)	(57,376		)
Patent expenditures	(57,199		)	(48,579		)
Net cash used in investing activities	(60,311		)	(105,955		)

Cash flows from financing activities:
Proceeds from sale of common stock and warrants, net	—			15,841,690
Proceeds from options & warrants exercised	171,218			1,441,586
Proceeds from issuance of notes payable to related parties	—			100,000
Repayments of notes payable to related parties, including loan fees	—			(108,163		)
Repayments of leasehold improvement debt	(6,913		)	—
Net cash provided by financing activities	164,305			17,275,113

Net increase/(decrease) in cash	(5,627,508		)	13,036,888

Cash and cash equivalents at beginning of period	7,521,071			1,361,214
Cash and cash equivalents at end of period	$	1,893,563		$	14,398,102

Supplemental Schedule of Non-cash Investing and Financing Activities:

Incurred patent expenditures contained in accrued expenses	$	17,000		$	25,038
Common stock issued in payment of loan fees	$	—		$	7,837

See accompanying notes to the condensed consolidated financial statements.

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LPATH, INC.

Notes to Condensed Consolidated Financial Statements

June 30, 2008

Note 1 – BASIS FOR PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by accounting principles generally accepted in the United States for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Operating results for the six and three month periods ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. For further information, refer to the consolidated financial statements and footnotes thereto included in the company’s annual report on Form 10-KSB for the year ended December 31, 2007.

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

Note 2 — SUBSEQUENT EVENT – RECENT FINANCING

On August 12, 2008, Lpath received gross proceeds of $6,400,000 in a private placement of shares of common stock and warrants. In this transaction, Lpath issued 6,775,210 shares of Class A common stock at a price of $0.95 per share. Each investor also received warrants to purchase the number of shares of Class A common stock equal to 25% of the number of common shares purchased in this financing. This resulted in the issuance of warrants to purchase a total of 1,693,802 shares of Class A common stock in this transaction. The warrants are exercisable at a price of $1.25 per share, and expire on August 8, 2013.

Note 3 – GOING CONCERN

The accompanying condensed consolidated financial statements have been prepared assuming that the company will continue as a going concern. In the six months ended June 30, 2008, Lpath incurred a net loss and utilized net cash in operating activities of $7,511,163 and $5,731,502, respectively. In the year ended December 31, 2007 the company incurred a net loss and utilized net cash in operating activities of $15,091,760 and $10,918,841, respectively. These conditions raise substantial doubt about the company’s ability to continue as a going concern. Management’s plans with regard to these matters are discussed below. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

During the ensuing year, the company expects to continue to incur cash losses from operations. While the company had cash totaling $1,893,563 as of June 30, 2008, and raised gross proceeds of approximately $6.4 million in August 2008 (see Note 2), the cost of its ongoing drug discovery and development efforts, including general and administrative expenses, are expected to consume a total of more than $20,000,000 in the next year. Additional capital will be required to continue to fund the company’s research and development projects in 2009 and beyond. The company plans to bridge such cash shortfalls by a variety of actions, including to

1. Explore cash generating opportunities from strategic alliances, including licensing portions of our technology or entering into corporate partnerships or collaborations. In such transactions, Lpath could transfer certain rights to one or more of its drug discovery or development programs, or to specific indications within those programs and receive infusions of cash in the short-term, and potentially in the long-term as well.

2. Pursue additional fund raising activities from both existing and potential new investors.

3. Continue to seek additional research grants from the National Institutes of Health or other sources.

The company is in the process of acquiring additional capital to fund operations for 2009 and beyond; however, no assurance can be given that the company will be able to obtain additional financing when and as needed in the future.

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Note 4 – SHARE-BASED PAYMENTS

The company recognized share-based compensation expense in accordance with SFAS No. 123R, “Share-Based Payment,” as follows:

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2008		2007		2008		2007

Research and development	$	617,889	$	643,172	$	12,457	$	204,881
General and administrative	1,236,584		290,734		305,860		104,316
Total share-based compensation expense	$	1,854,473	$	933,906	$	318,317	$	309,197

As of June 30, 2008 there was a total of $3.1 million unrecognized compensation expense related to unvested stock-based compensation under the plan. That expense is expected to be recognized over a weighted-average period of 2 years. Because of its net operating losses, the company did not realize any tax benefits for the tax deductions from share-based payment arrangements during the periods ended June 30, 2008 and 2007.

Note 5 – RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the Financial Accounting Standards Boards (FASB) issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (SFAS 160). SFAS 160 requires an entity to clearly identify and present ownership interests in subsidiaries held by parties other than the entity in the consolidated financial statements within the equity section but separate from the entity’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income; changes in ownership interest be accounted for similarly, as equity transactions; and when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair value. This statement is effective for financial statements issued for fiscal years beginning after Dec. 15, 2008. The adoption of SFAS 160 is not expected to have a material effect on the company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161). SFAS 161 amends and expands the disclosure requirements of SFAS 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). It requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. This statement is effective for financial statements issued for fiscal periods beginning after Nov. 15, 2008. The adoption of SFAS 161 is not expected to have a material effect on the company’s consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS 162). SFAS 162 identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation and presentation of financial statements in accordance with generally accepted accounting principles. This statement will be effective 60 days after the Securities and Exchange Commission approves the Public Company Accounting Oversight Board’s amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The company does not anticipate the adoption of SFAS 162 will have a material effect on the consolidated financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and notes thereto included in this quarterly report on Form 10-Q (the “Quarterly Report”) and the audited financial statements and notes thereto included in our annual report on Form 10-KSB for the year ended December 31, 2007 (the “2007 Annual Report”), as filed with the Securities and Exchange Commission (the “SEC”). In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors including but not limited to those identified in the 2007 Annual Report in the section entitled “Market Risks.”

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Overview

Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics. Lipidomics is an emerging field of medical science whereby bioactive signaling lipids are targeted to treat important human diseases. Our lead product candidate, ASONEP™, is a monoclonal antibody against sphingosine-1-phosphate (S1P). ASONEP is currently in Phase 1 clinical trials and holds promise for the treatment of cancer, multiple sclerosis, and other diseases. A second product candidate, iSONEP™ (another formulation of the same S1P-targeted antibody) will soon enter Phase I clinical trials, and has demonstrated superior results in various models of human ocular disease, including age-related macular degeneration, retinopathy, and glaucoma. Our third product candidate, Lpathomab™, is an antibody against lysophosphatidic acid (LPA), a key bioactive lipid that has been long recognized as a valid disease target. Lpath’s unique ability to generate novel antibodies against bioactive lipids is based on its ImmuneY2™ technology, a series of proprietary processes developed by the company. We are currently applying the Immune Y2 process to other lipid-signaling agents that are validated targets for disease treatment, thereby potentially creating a pipeline of monoclonal antibody-based drug candidates.

Lpath has incurred significant net losses since its inception. As of June 30, 2008, Lpath had an accumulated deficit of approximately $35.7 million. Lpath expects its operating losses to increase for the next several years as it pursues the clinical development of its product candidates.

Results of Operations

Comparison of the Six Months Ended June 30, 2008 and June 30, 2007

Grant and Royalty Revenue. Grant and royalty revenue for the six-month period ended June 30, 2008 increased to $475,000 from $350,000 for the six-month period ended June 30, 2007. The increase of $125,000 reflects the commencement of work on a grant in the first half of 2008.

Research and Development Expenses. Research and development expenses increased from $5,007,000 for the first six months of 2007 to $5,643,000 for the first six months of 2008. The increase of $637,000 reflects the costs of pre-clinical research and development activities undertaken principally in the first quarter of 2008. Outside services expense increased by approximately $463,000 primarily due to the costs of manufacturing drug supplies to be used in clinical trials. The use of consultants and other contracted services to augment the capabilities of our research and development team also contributed to the increase in expenditures for outside services by approximately $79,000. Employee compensation and benefits expense increased by approximately $128,000, commensurate with the increase in research and development staffing. Stock-based compensation charges decreased by $25,000 due primarily to the decrease in the market value of Lpath’s common stock, which is a key factor in the calculation of stock-based compensation expense for outside consultants. This was partially offset by the vesting of restricted stock units upon the achievement of specified clinical trial milestones during the first half of 2008.

General and Administrative Expenses. General and administrative expenses increased from $1,700,000 for the six-month period ended June 30, 2007 to $2,418,000 for the six-month period ended June 30, 2008, an increase of $718,000. Stock-based compensation charges increased by $946,000 due primarily to the vesting of restricted stock units tied to the achievement of specified clinical trial milestones in the first half of 2008. Legal fees decreased by approximately $144,000 because substantial legal expenses were incurred in the first six months of 2007 in negotiation of corporate collaboration arrangements. Employee compensation and benefits decreased by approximately $79,000, due to bonuses recognized in the second quarter of 2007; a reduction partially offset by increases in base compensation in 2008.

Interest Income. Interest income was $78,000 for the six months ended June 30, 2008, compared with $134,000 for the six months ended June 30, 2007. The $56,000 decrease was principally a result of higher levels of invested cash in 2007.

Comparison of the Three Months Ended June 30, 2008 and June 30, 2007

Grant and Royalty Revenue. Grant and royalty revenue for the three-month period ended June 30, 2008 increased to $462,000 from $153,000 for the three-month period ended June 30, 2007. The increase of $309,000 reflects the commencement of work on a grant in the second quarter of 2008.

Research and Development Expenses. Research and development expenses decreased from $2,828,000 for the second quarter of 2007 to $2,039,000 for the second quarter of 2008. The decrease of $789,000 reflects the decrease in discretionary spending to conserve cash until a pending financing could be completed. As a result, outside services expense decreased by approximately $585,000. Stock-based compensation charges decreased by $192,000 due primarily to the decrease in the

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market value of Lpath’s common stock, which is a key factor in the calculation of stock-based compensation expense for outside consultants.

General and Administrative Expenses. General and administrative expenses decreased from $967,000 for the three-month period ended June 30, 2007 to $875,000 for the three-month period ended June 30, 2008, a decrease of $92,000. Payroll expenses decreased by $137,000 compared to the second quarter of 2007 due to bonuses recognized in the second quarter of 2007, which are partially offset by increases in base compensation in 2008. Stock-based compensation charges increased by $202,000 due to the vesting of restricted stock units issued to employees. Legal, consulting, and investor relations expenses decreased in the aggregate by approximately $117,000 in 2008 in conjunction with the company’s efforts to reduce discretionary spending.

Interest Income. Interest income was $20,000 for the quarter ended June 30, 2008, compared with $125,000 for the quarter ended June 30, 2007. The $105,000 decrease was principally a result of lower levels of invested cash as compared to the prior year.

Liquidity and Capital Resources

Since Lpath’s inception, its operations have been financed primarily through the private placement of equity and debt securities. Through June 30, 2008 Lpath had received net proceeds of approximately $30,000,000 from the sale of equity securities and from the issuance of convertible promissory notes. As of June 30, 2008, Lpath had cash and cash equivalents totaling $1,894,000.

During the six-month period ended June 30, 2008 we used net cash of $5,732,000 for operating activities compared to $4,132,000 in the first half of 2007. The increase in net cash used in operating activities was a result of the costs of preparing for and beginning Phase 1 clinical trials for our two lead drug candidates and manufacturing drug supplies to be used in clinical trials.

Net cash used in investing activities during the first half of 2008 amounted to $60,000 compared to $106,000 in the first half of 2007. Of the amount used for investing activities in the first half of 2008, $57,000 was invested in the prosecution of additional patents compared to $49,000 in 2007. In the comparable period of 2007, $57,000 was used to purchase new equipment compared to $3,000 in 2008.

Net cash provided from financing activities during the six month period ended June 30, 2008 totaled approximately $164,000 compared to $17,275,000 in the first six months of 2007. During the first half of 2007 $1,442,000 was received from stock option and warrant exercises compared to $171,000 in 2008. In the first half of 2007, the company realized proceeds from the sale of common stock and warrants totaling $15,842,000 and $100,000 was borrowed under the terms of the promissory notes payable to related parties.

2. Pursue additional fund raising activities from both existing and potential new investors.

3. Continue to seek additional research grants from the National Institutes of Health or other sources.

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Critical Accounting Policies, Estimates and Judgments

Our financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments, the most critical of which are those related to revenue recognition, valuation of long-lived assets, share-based compensation, the timing of the achievement of drug development milestones, and income taxes. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known.

Besides the estimates identified above that are considered critical, we make many other accounting estimates in preparing our financial statements and related disclosures. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

For further information, refer to the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-KSB for the year ended December 31, 2007.

Recent Accounting Pronouncements

Refer to Note 5 to the financial statements for a discussion of the impact of recent accounting pronouncements.

Item 4. CONTROLS AND PROCEDURES

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

Under the supervision of our principal executive officer and principal financial officer, and with the participation of all members of management, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a- 15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were designed and operating effectively as of the end of the period covered by this Quarterly Report on Form 10-Q.

Our management, including our principal executive officer and our principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended June 30, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATON

Item 1. LEGAL PROCEEDINGS

None.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

On June 5, 2008 we held our Annual Meeting of the Stockholders in San Diego, California. Matters voted upon were (1) election of directors and (2) ratification of the Board’s selection of LevitZacks as the Company’s independent auditors for the fiscal year ending December 31, 2008.

The number of votes cast for, against or withheld, with respect to each matter are set out below.

1. Election of Directors

				Broker
Director	For	Against	Withheld	Non-votes
Scott R. Pancoast	36,531,853	—	12,300	3,995,564
Roger A. Sabbadini	36,532,053	—	12,100	3,995,564
Jeffrey Ferrell	36,536,553	—	7,600	3,995,564
Charles A. Mathews	36,536,553	—	7,600	3,995,564
Donald R. Swortwood	36,531,643	—	12,510	3,995,564

2. Ratification of Independent Auditors

				Broker
For	Against	Withheld	Abstain	Non-votes
40,128,153	—	5,000	7,000	399,656

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

The following exhibit index shows those exhibits filed with this report and those incorporated herein by reference:

2.1*		Agreement and Plan of Reorganization, by and between Neighborhood Connections, Inc., Neighborhood Connections Acquisition Corporation, and Lpath Therapeutics Inc. dated July 15, 2005.

2.2		Acquisition Agreement and Plan of Merger, dated as of March 19, 2004, between Neighborhood Connections, Inc. and JCG, Inc. (filed as Exhibit 2.1 to the Current Report on Form 8-K filed on March 22, 2004 and incorporated herein by reference).

3.1*		Amendment to Articles of Incorporation filed December 1, 2005.

3.2		Articles of Incorporation filed on September 18, 2002 (filed as Exhibit 3.1 to Amendment No. 1 to the Annual Report on Form 10-KSB/A for the year ended December 31, 2003 (the “2003 Amended 10-KSB”) (filed on March 25, 2004 and incorporated herein by reference).

3.3		Amendment to Articles of Incorporation filed on December 27, 2002 (filed as Exhibit 3.3 to the Current Report on Form 8-K/A filed on January 9, 2006 and incorporated herein by reference).

3.4		Amended and Restated By-laws (filed as Exhibit 3.4 to the Quarterly Report on Form 10-QSB filed on November 13, 2006 and incorporated herein by reference).

3.5		Amended and Restated Bylaws, as amended on April 3, 2007 (conformed) (filed as Exhibit 3.5 to the Registration Statement on Form SB-2, SEC File No. 144199 (the “June 2007 SB-2”) and incorporated herein by reference).

3.6		Certificate of Amendment of Articles of Incorporation filed June 8, 2007 (filed as Exhibit 3.6 to the June 2007 SB-2 and incorporated herein by reference).

4.1*		Form of Warrant issued to Western States Investment Corporation for lease guaranty.

4.2*		Form of Warrant issued pursuant to the Common Stock and Warrant Purchase Agreement dated June 30, 2005.

4.3*		Form of Warrant issued to Johnson & Johnson Development Corporation dated April 3, 2002.

4.4*		Form of Warrant issued to purchasers of Convertible Secured Promissory Notes as amended by the Omnibus Amendment to Convertible Secured Promissory Notes and Warrants dated November 30, 2005.

4.5*		Form of Warrant issued pursuant to the Common Stock and Warrant Purchase Agreement dated November 30, 2005.

4.6#		Form of Warrant issued pursuant to the Common Stock and Warrant Purchase Agreement dated January 31, 2006.

4.7		Form of Warrant issued pursuant to the Common Stock and Warrant Purchase Agreement dated March 28, 2006 (filed as Exhibit 4.7 to the registration statement on Form SB-2 filed on March 30, 2006, SEC File No. 333-132850, and incorporated herein by reference).

4.8		Form of Warrant issued pursuant to the Securities Purchase Agreement dated April 6, 2007 (April 2007 Warrants) (filed as Exhibit 4.7 to the June 2007 SB-2 and incorporated herein by reference).

4.9		Form of Warrant issued pursuant to the Securities Purchase Agreement dated June 13, 2007 (June 2007 Warrants) (filed as Exhibit 4.8 to the June 2007 SB-2 and incorporated herein by reference).

10.1*		Lease Agreement dated August 12, 2005 between Lpath Therapeutics Inc. and Pointe Camino Windell, LLC.

10.2*		Research Agreement dated January 28, 2004 between Medlyte, Inc. and San Diego State University, together with Amendments No.1 and No.2.

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10.3*		Assignment Agreement dated June 9, 2005 between Lpath Therapeutics Inc. and LPL Technologies, Inc.

10.4		Research Collaboration Agreement dated August 2, 2005 between Lpath Therapeutics Inc. and AERES Biomedical Limited (filed as Exhibit 10.4 to the Current Report on Form 8-K/A filed on January 9, 2006 and incorporated herein by reference) (portions of this exhibit have been omitted pursuant to a request for confidential treatment).

10.7*		Lpath, Inc. Amended and Restated 2005 Equity Incentive Plan (filed as Appendix A to the company’s Schedule 14-A Proxy Statement filed on August 28, 2007 and incorporated herein by reference).+

10.8#		Assignment and Assumption Agreement dated December 1, 2005 by and between Lpath, Inc. and Lpath Therapeutics, Inc.

10.9**		Form of Employment Agreement between Lpath, Inc. and Scott R. Pancoast dated as of January 1, 2006.+

10.10**		Form of Employment Agreement between Lpath, Inc. and Gary Atkinson dated as of February 6, 2006.+

10.11**		Form of Consultant Agreement between Lpath, Inc. and William Garland dated as of January 1, 2006.+

10.12**		Form of Consultant Agreement between Lpath, Inc. and Roger Sabbadini dated as of February 1, 2006.+

10.13		Development and Manufacturing Services Agreement dated August 16, 2006 between Lpath Inc. and Laureate Pharma, Inc. (filed as Exhibit 10.13 to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 filed on November 13, 2006 and incorporated by reference) (portions of this exhibit have been omitted pursuant to a request for confidential treatment).

10.14		Securities Purchase Agreement, dated as of April 6, 2007, by and among Lpath, Inc. and each investor identified therein (filed as Exhibit 10.14 to the June 2007 SB-2 and incorporated herein by reference).

10.15		Registration Rights Agreement, dated as of April 6, 2007, by and among Lpath, Inc. and each investor identified therein (filed as Exhibit 10.15 to the June 2007 SB-2 and incorporated herein by reference).

10.16##		License Agreement dated August 8, 2006 between Lonza Biologics PLC and Lpath, Inc. (portions of this exhibit have been omitted pursuant to a request for confidential treatment).

14.1#		Code of Ethics of Lpath, Inc.

21.1#		List of Subsidiaries of Registrant.

31.1		Section 302 Certification by Chief Executive Officer of Lpath, Inc.

31.2		Section 302 Certification by Chief Financial Officer of Lpath, Inc.

32.1		Section 906 Certification by CEO and CFO of Lpath, Inc.

*Filed as an exhibit to the Current Report on Form 8-K filed with the SEC on December 6, 2005 and incorporated herein by reference.

#Filed as an exhibit to the Annual Report on Form 10-KSB for the year ended December 31, 2005 filed with the SEC on March 16, 2006 and incorporated herein by reference.

**Filed as an exhibit to the Current Report on Form 8-K filed with the SEC on March 29, 2006 and incorporated herein by reference.

##Filed as an exhibit to the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2007 filed with the SEC on November 13, 2007 and incorporated herein by reference.

+Management contract, or compensation plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

	Lpath, Inc.


Date: August 14, 2008	/s/ Scott R. Pancoast
	Scott R. Pancoast
	President and Chief Executive
	Officer
	(Principal executive officer)


	/s/ Gary J.G. Atkinson
	Gary J.G. Atkinson,
	Vice President and Chief
	Financial Officer
	(Principal financial and
	accounting officer)

Apollo Endosurgery, Inc. - Quarter Report: 2008 June (Form 10-Q)

Note 4 – SHARE-BASED PAYMENTS

Note 5 – RECENT ACCOUNTING PRONOUNCEMENTS

Table of Contents

SIGNATURES