As filed with the Securities and Exchange Commission on August 9, 2005
Registration No. 333-126687
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
PRE-EFFECTIVE AMENDMENT NO. 1
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
PharmaFrontiers Corp.
(Name of small business issuer on its charter)

Texas 2834 76-0333165
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Industrial Classification Identification Number)
Organization) Code Number)

2408 Timberloch Place, Suite B-7
The Woodlands, Texas 77380
(281) 272-9331
(Address and telephone number
of principal executive offices and principal place of business)
-------------------
C. William Rouse
2408 Timberloch Place, Suite B-7
The Woodlands, Texas 77380
(281) 272-9331
(Name, address and telephone number
of agent for service)
-------------------
Copy to:
Michael C. Blaney
Vinson & Elkins L.L.P.
1001 Fannin, Suite 2300
Houston, TX 77002
(713) 758-2222
-------------------

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: |_|
-------------------

CALCULATION OF REGISTRATION FEE
Proposed
maximum Proposed maximum
Title of each class of Amount to offering price aggregate Amount of
securities to be registered be registered per unit (1) offering price registration fee
- -------------------------------- ------------- -------------- ---------------- ----------------

Common Stock, $0.05 par value... 12,785,123 $ 2.65 $ 33,880,576 $ 4,293
Common Stock, $0.05 par value
(2)............................. 10,382,478 $ 2.65 $ 27,513,566 $ 3,486
Common Stock, $0.05 par value
(3)............................. 4,247,024 $ 2.65 $ 11,254,613 $ 1,426
Common Stock, $0.05 par value
(4)............................. 8,272,795 $ 2.65 $ 21,922,906 $ 2,778
Common Stock , $0.05 par value
(5)............................. 460,847 $ 2.65 $ 1,221,245 $ 155
------------- -------------- --------------- ----------------
Total 36,148,266 $ 95,792,905 $ 12,137

___________________

(1) Pursuant to Rule 457(c) calculated on the basis of the average of the bid
and asked prices of the common stock as reported by the OTC Bulletin Board
on July 13, 2005.
(2) Represents the number of shares that may be sold by the selling
shareholders following exercise of the Series A Warrants.
(3) Represents the number of shares that may be sold by the selling
shareholders following exercise of the Series B Warrants.
(4) Represents the number of shares that may be sold by the selling
shareholders following exercise of the Series C Warrants.
(5) Represents the number of shares that may be sold by the selling
shareholders following exercise of the placement agent warrants.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until this registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================

PharmaFrontiers Corp.

36,148,266 Shares of Common Stock

This prospectus relates to the resale from time to time by the selling
stockholders of up to 36,148,266 shares of our common stock, including
12,785,123 shares of common stock previously issued and 23,363,143 shares of
common stock issuable upon the exercise of common stock purchase warrants. The
selling stockholders may sell the shares of common stock from time to time in
the principal market on which the stock is traded at the prevailing market price
or in negotiated transactions.

Shares of our common stock are traded on the NASD OTC Bulletin Board under
the symbol "PFTR.OB." On August 5, 2005, the last reported sales price for our
common stock on the OTC Bulletin Board was $2.04 per share.

We will not receive any proceeds from the sale of the shares of our common
stock covered by this prospectus.

-----------------------------------

Investing in our common stock involves a high degree of risk. You should
read carefully this entire prospectus, including the section captioned "Risk
Factors" beginning on page 3, before making a decision to purchase our stock.

-----------------------------------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

The date of this prospectus is August 10, 2005.

TABLE OF CONTENTS

Page

PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................3
FORWARD LOOKING STATEMENTS.....................................................8
USE OF PROCEEDS................................................................9
PRICE RANGE OF OUR COMMON STOCK AND DIVIDEND POLICY............................9
SELECTED HISTORICAL FINANCIAL DATA............................................10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS........................................................11
OUR BUSINESS..................................................................16
MANAGEMENT....................................................................27
EXECUTIVE COMPENSATION........................................................31
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................33
SELLING STOCKHOLDERS..........................................................35
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS..........................52
DESCRIPTION OF SECURITIES.....................................................53
PLAN OF DISTRIBUTION..........................................................56
LEGAL MATTERS.................................................................58
EXPERTS.......................................................................58
WHERE YOU CAN FIND MORE INFORMATION...........................................58
INDEX TO FINANCIAL STATEMENTS................................................F-1
INFORMATION NOT REQUIRED IN PROSPECTUS......................................II-1

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information that is different.
This prospectus may only be used where it is legal to sell these shares of our
common stock. The information in this prospectus may only be accurate as of the
date of this prospectus.

This prospectus provides you with a general description of the shares of
our common stock that the selling stockholders may offer. Each time a selling
stockholder sells shares of our common stock, the selling stockholder is
required to provide you with a prospectus containing specific information about
the selling stockholder and the terms of the shares of our common stock being
offered to you.

This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission for a continuous offering. Under this
prospectus, the selling stockholders may, from time to time, sell the shares of
our common stock described in this prospectus in one or more offerings. This
prospectus may be supplemented from time to time to add, update or change
information in this prospectus. Any statement contained in this prospectus will
be deemed to be modified or superseded for the purposes of this prospectus to
the extent that a statement contained in a prospectus supplement modifies such
statement. Any statement so modified will be deemed to constitute a part of this
prospectus only as so modified, and any statement so modified will be deemed to
constitute a part of this prospectus.

The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about
us, the selling stockholders and the shares of our common stock offered under
this prospectus. The registration statement, including the exhibits, can be read
on the SEC website or at the SEC offices mentioned under the heading "Where You
Can Find More Information."

-i-

PROSPECTUS SUMMARY

The following summary highlights selected information from this prospectus
and does not contain all of the information that you should consider before
investing in our common stock. This prospectus contains information regarding
our businesses and detailed financial information. You should carefully read
this entire prospectus, including the historical financial statements and
related notes, before making an investment decision.

In this prospectus, "PharmaFrontiers Corp.," the "company," "we," "us" or
"our" refer to PharmaFrontiers Corp., a Texas corporation, and its subsidiaries,
except where otherwise indicated or required by context.

Our Business

We are a biopharmaceutical company engaged in developing autologous
personalized cell therapies. Our strategy is to develop and commercialize cell
therapies to treat several major diseases including multiple sclerosis,
cardiovascular diseases, and diabetes. We have an exclusive license to an
individualized T cell therapy that is in two FDA Phase I/II clinical trials; a
dose ranging trial and an extension study trial to evaluate its safety and
effectiveness in treating multiple sclerosis. We also have an exclusive license
to a stem cell technology in which adult pluripotent stem cells are derived from
monocytes obtained from the patient's own blood. We are initially pursuing
indications in heart failure and Type I diabetes with our stem cell therapy.

Autologous therapies use cells or other materials from the patient's own
body to create treatments for the patient, thus preventing rejection
complications that result when "foreign" or "non-self" cells are introduced into
a patient. Cellular therapies are expected to play a large role in the treatment
and cure of a broad spectrum of human diseases. According to independent market
researchers, cellular therapies along with their related technologies, such as
diagnostics and blood banking, may exceed $30 billion by 2010.

Our multiple sclerosis cell therapy, Tovaxin(TM), is currently in Phase
I/II studies. Tovaxin(TM) consists of modified autoreactive T cells. Multiple
sclerosis is a result of a person's own T cells attacking the myelin sheath that
coats the nerve cells of the central nervous system. These T cells, that attack
a person's own body, are referred to as "autoreactive" T cells. In our treatment
the T cells are taken from the patient, modified and returned to the patient.
The modified T cells cause an immune response directed at the autoreactive T
cells in the patient's body. This immune response reduces the level of
autoreactive T cells and potentially allows the myelin sheath to be repaired. In
addition, we are evaluating whether this technology will allow us to diagnose
multiple sclerosis and determine the severity of the disease through an analysis
of the level of autoreactive T cells in a patient's blood.

Two clinical studies of Tovaxin(TM) have reached critical milestones:

o In one study, a first group of 10 patients has been enrolled and
received two doses of Tovaxin(TM) in a repeat treatment Phase I/II
protocol. This protocol is designed to determine whether patients who
received clinical benefit from T cell therapy in a previous study
conducted at the Baylor College of Medicine can be safely and
effectively re-treated with a second-generation T cell therapy.
Six-month clinical results evaluating safety, tolerability and
efficacy are expected to be available by the third quarter of 2005.

o In the second study, a Phase I/II dose-escalating study designed to
evaluate safety, tolerability and efficacy in 9 to 15 patients, 8
patients have completed the initial four dose injection series for two
dosage levels and the 28-week portion of the study. One-year clinical
results evaluating safety, tolerability, dosage timing and efficacy
are expected to be available by the third quarter of 2005.

We intend to submit data from these two clinical studies to the FDA for
approval to commence a pivotal Phase IIb study in the fourth quarter of 2005.

Our stem cell technology allows us to create adult pluripotent stem cells
from monocytes isolated from blood drawn from the patient. We believe that these
stem cells, if successfully developed, may provide the basis for therapies to
treat a variety of diseases and conditions. We anticipate that our stem cell
technology will have a significant competitive advantage over many of the other
stem cell technologies. The peripheral blood monocytes, used by our technology
to produce stem cells, have the advantage of being relatively abundant and easy
and cost effective to obtain. Our technology does not have the collection and
storage difficulties presented by umbilical cord blood or the controversial
ethical and regulatory issues associated with embryonic stem cells. In addition,
our technology is less difficult and less risky than collecting adult stem cells
from tissues such as bone marrow, spinal fluid or adipose (fat) tissue.
Furthermore, our stem cells are pluripotent, whereas adult stem cells used in
competitive technologies are not likely to be pluripotent.

Our stem cell technology will also avoid rejection issues because it is
autologous ("self"). This is as opposed to the embryonic, umbilical, and some
adult stem cell technologies, which in some cases must be taken from one
individual and given to another. Further, we believe our stem cell therapies
will be regulated as autologous "manipulated" non-homologous use cell therapies.
Thus, we use an individuals' own stem cells, and we therefore do not expect to
encounter the same significant pre-clinical and clinical development regulatory
hurdles that embryonic, umbilical, and some adult stem cells therapies are
expected to face.

Initially we are conducting pre-clinical research to develop stem cell
therapies to treat heart failure and Type I diabetes. We plan to move
expeditiously through pre-clinical development of our cardiac stem cell therapy
and, if successful, initiate human testing in 2006.

We believe that with our stem cell technology plus our additional
technology related to the differentiation of stem cells into islet cells, we
will be able to create insulin producing islet cells derived from the patient's
own blood. We are currently conducting laboratory research and plan to move
expeditiously through pre-clinical development of our diabetes stem cell therapy
and, if successful, initiate human testing in 2006.

Our Executive Offices

Our principal executive and administrative office facility is located in
The Woodlands, Texas at 2408 Timberloch, Suite B-7, The Woodlands, Texas 77380
and our telephone number is (281) 272-9331. We maintain a website at
www.pharmafrontiers.net, however the information on our website is not part of
this prospectus, and you should rely only on information contained in this
prospectus when making a decision as to whether or not to invest in shares of
our common stock.

RISK FACTORS

The shares offered hereby have not been approved or disapproved by the SEC
or the securities regulatory authority of any state, nor has any such regulatory
body reviewed this Memorandum for accuracy or completeness. The shares offered
hereby are speculative, involve an unusually high degree of risk and should only
be purchased by those who can afford to lose their entire investment. Therefore,
prospective investors should carefully consider the following risk factors
before purchasing the shares offered hereby.

The following factors affect our business and the industry in which it
operates. The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties not presently known or that we
currently consider immaterial may also have an adverse effect on our business.
If any of the matters discussed in the following risk factors were to occur, our
business, financial condition, results of operations, cash flows, or prospects
could be materially adversely affected.

Risks Related to Our Business

We have a limited operating history, no approved products and no revenues and
are subject to risks inherent in a new business enterprise.

Our business is at an early stage of development. We do not have any
products in late-stage clinical trials or on the market. We are still in the
early stages of identifying and conducting research on potential products. Our
potential products will require significant research and development and
preclinical and clinical testing prior to regulatory approval in the United
States and other countries. We may not be able to develop any products, to
obtain regulatory approvals, to enter clinical trials for any of our product
candidates, or to commercialize any products. Our product candidates may prove
to have undesirable and unintended side effects or other characteristics
adversely affecting their safety, efficacy or cost-effectiveness that could
prevent or limit their use. Any product using any of our technology may fail to
provide the intended therapeutic benefits, or achieve therapeutic benefits equal
to or better than the standard of treatment at the time of testing or
production.

We have a history of operating losses and do not expect to be profitable in the
near future.

We have not generated any profits since our entry into the biotechnology
business, have no source of revenues, and have incurred significant operating
losses. We expect to incur additional operating losses for the foreseeable
future and, as we increase our research and development activities, we expect
our operating losses to increase significantly. We do not have any sources of
revenues and may not have any in the foreseeable future.

We will need additional capital to conduct our operations and develop our
products, and our ability to obtain the necessary funding is uncertain.

We need to obtain significant additional capital resources through equity
and/or debt financings, grants and/or collaborative research arrangements in
order to develop products and continue our business. As of July 18, 2005, after
closing the private offering that day, the Company had cash and cash equivalents
of approximately $5,696,938. The Company's current burn rate is approximately
$500,000 per month. The timing and degree of any future capital requirements
will depend on many factors, including:

o the accuracy of the assumptions underlying our estimates for our
capital needs in 2005 and beyond;

o scientific progress in our research and development programs;

o the magnitude and scope of our research and development programs;

o our ability to establish, enforce and maintain strategic arrangements
for research, development, clinical testing, manufacturing and
marketing;

o our progress with preclinical development and clinical trials;

o the time and costs involved in obtaining regulatory approvals;

o the costs involved in preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims; and

o the number and type of product candidates that we pursue.

We do not have any committed sources of capital. Additional financing
through strategic collaborations, public or private equity financings, capital
lease transactions or other financing sources may not be available on acceptable
terms, or at all. Additional equity financings could result in significant
dilution to our stockholders. Further, if additional funds are obtained through
arrangements with collaborative partners, these arrangements may require us to
relinquish rights to some of our technologies, product candidates or products
that we would otherwise seek to develop and commercialize ourselves. If
sufficient capital is not available, we may be required to delay, reduce the
scope of or eliminate one or more of our programs, any of which could have a
material adverse effect on our business.

Patents obtained by other persons may result in infringement claims against us
that are costly to defend and which may limit our ability to use the disputed
technologies and prevent us from pursuing research and development or
commercialization of potential products.

A number of pharmaceutical, biotechnology and other companies, universities
and research institutions have filed patent applications or have been issued
patents relating to cell therapy, stem cells, T cells, and other technologies
potentially relevant to or required by our expected products. We cannot predict
which, if any, of such applications will issue as patents or the claims that
might be allowed. We are aware that a number of companies have filed
applications relating to stem cells. We are also aware of a number of patent
applications and patents claiming use of stem cells and other modified cells to
treat disease, disorder or injury.

If third party patents or patent applications contain claims infringed by
either our licensed technology or other technology required to make and use our
potential products and such claims are ultimately determined to be valid, there
can be no assurance that we would be able to obtain licenses to these patents at
a reasonable cost, if at all, or be able to develop or obtain alternative
technology. If we are unable to obtain such licenses at a reasonable cost, we
may not be able to develop some products commercially. There can be no assurance
that we will not be obliged to defend ourselves in court against allegations of
infringement of third party patents. Patent litigation is very expensive and
could consume substantial resources and create significant uncertainties. An
adverse outcome in such a suit could subject us to significant liabilities to
third parties, require disputed rights to be licensed from third parties, or
require us to cease using such technology.

Our competition includes fully integrated pharmaceutical companies that have
significant advantages over us.

The markets for both therapeutic stem cell products and multiple sclerosis
products are highly competitive. We expect that our most significant competitors
will be fully integrated pharmaceutical companies and more established
biotechnology companies. These companies are developing stem cell-based
products, and they have significantly greater capital resources and expertise in
research and development, manufacturing, testing, obtaining regulatory approvals
and marketing than we currently do. Many of these potential competitors are
further along in the process of developing products and also operate large,
well-funded research and development programs. As a result, our competitors may
develop more competitive or affordable products, or achieve earlier patent
protection or product commercialization than we do. Competitive products may
render any products or product candidates that we develop obsolete.

If we fail to meet our obligations under our license agreements, we may lose our
rights to key technologies on which our business depends.

Our business currently depends on two licenses from third parties. Those
third party license agreements impose obligations on us, such as payment
obligations and obligations to diligently pursue development of commercial
products under the licensed patents. If a licensor believes that we have failed
to meet our obligations under a license agreement, the licensor could seek to
limit or terminate our license rights, which could lead to costly and
time-consuming litigation and, potentially, a loss of the licensed rights.
During the period of any such litigation, our ability to carry out the
development and commercialization of potential products could be significantly
and negatively affected. If our license rights were restricted or ultimately
lost, our ability to continue our business based on the affected technology
platform would be severely adversely affected.

If we are unable to obtain future patents and other proprietary rights our
operations will be significantly harmed.

Our ability to compete effectively is dependent in part upon obtaining
patent protection relating to our technologies. The patent positions of
pharmaceutical and biotechnology companies, including ours, are uncertain and
involve complex and evolving legal and factual questions. The coverage sought in
a patent application can be denied or significantly reduced before or after the
patent is issued. Consequently, we do not know whether the patent applications
for our technology will result in the issuance of patents, or if any future
patents will provide significant protection or commercial advantage or will be
circumvented by others. Since patent applications are secret until the
applications are published (usually eighteen months after the earliest effective
filing date), and since publication of discoveries in the scientific or patent
literature often lags behind actual discoveries, we cannot be certain that the
inventors of our licensed patents were the first to make the inventions covered
by the patent applications or that the licensed patent applications were the
first to be filed for such inventions. There can be no assurance that patents
will issue from the patent applications or, if issued, that such patents will be
of commercial benefit to us, afford us adequate protection from competing
products, or not be challenged or declared invalid.

Restrictive and extensive government regulation could slow or hinder our
production of a cellular product.

The research and development of stem cell therapies is subject to and
restricted by extensive regulation by governmental authorities in the United
States and other countries. The process of obtaining U.S. Food and Drug
Administration, or FDA, and other necessary regulatory approvals is lengthy,
expensive and uncertain. We may fail to obtain the necessary approvals to
continue our research and development, which would hinder our ability to
manufacture or market any future product.

To be successful, our product candidates must be accepted by the health care
community, which can be very slow to adopt or unreceptive to new technologies
and products.

Our product candidates, if approved for marketing, may not achieve market
acceptance since hospitals, physicians, patients or the medical community in
general may decide to not accept and utilize these products. The product
candidates that we are attempting to develop represent substantial departures
from established treatment methods and will compete with a number of more
conventional drugs and therapies manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any of our
developed products will depend on a number of factors, including:

o our establishment and demonstration to the medical community of the
clinical efficacy and safety of our product candidates;

o our ability to create products that are superior to alternatives
currently on the market;

o our ability to establish in the medical community the potential
advantage of our treatments over alternative treatment methods; and

o reimbursement policies of government and third-party payors.

If the health care community does not accept our products for any of the
foregoing reasons, or for any other reason, our business would be materially
harmed.

We may be unable to open a blood cell bank facility, even if we have sufficient
capital.

We currently do not own or operate a blood cell bank facility. To our
knowledge, no other companies are freezing and storing pluripotent stem cells in
the manner in which we plan to implement. We may not be able to locate a
facility and/or personnel for the blood cell bank. Further, we may be unable to
convince HMO's, insurance companies and private individuals of the potential
benefit in cryofreezing an individual's blood for use in the future. The failure
to open and operate the blood cell bank facility may adversely affect our
business strategy.

Our management team has a limited history of working together.

We have a limited history of operations under our current officers and
directors. Although experienced, our officers have not worked together for an
extensive length of time. If for any reason our management members cannot work
efficiently as a team, our business will be adversely affected. Further, any
loss of one or more of our managers may also have an adverse affect on our
business.

Risks Related to Our Stock

There is currently a limited market for our common stock, and any trading market
that develops in the common stock may be highly illiquid and may not reflect the
underlying value of the Company's net assets or business prospects.

Although our common stock is currently traded on the OTC Bulletin Board,
there is currently a limited market for our common stock and there can be no
assurance that an improved market will ever develop. Accordingly, purchasers of
the shares offered hereby will be required to bear the economic consequences of
holding such securities for an indefinite period of time. An active trading
market for our common stock may not ever develop. Any trading market that does
develop may be volatile, and significant competition to sell our common stock in
any such trading market may exist, which could negatively affect the price of
our common stock. As a result, the value of our common stock may decrease.
Additionally, if a trading market does develop, such market may be highly
illiquid, and our common stock may trade at a price that does not accurately
reflect the underlying value of the Company's net assets or business prospects.
Investors are cautioned not to rely on the possibility that an active trading
market may develop or on the prices at which our stock may trade in any market
that does develop in making an investment decision. If our share price is
volatile, we may be the target of securities litigation, which is costly and
time-consuming to defend.

In the past, following periods of market volatility in the price of a
company's securities, security holders have often instituted class action
litigation. If the market value of our common stock experiences adverse
fluctuations and we become involved in this type of litigation, regardless of
the outcome, we could incur substantial legal costs and our management's
attention could be diverted from the operation of our business, causing our
business to suffer.

Our "blank check" preferred stock could be issued to prevent a business
combination not desired by management or our current majority shareholders.

Our articles of incorporation authorize the issuance of "blank check"
preferred stock with such designations, rights and preferences as may be
determined by our board of directors without shareholder approval. Our preferred
stock could be utilized as a method of discouraging, delaying, or preventing a
change in our control and as a method of preventing shareholders from receiving
a premium for their shares in connection with a change of control.

Future sales of our common stock in the public market could lower our stock
price.

We may sell additional shares of common stock in subsequent public or
private offerings. We may also issue additional shares of common stock to
finance future acquisitions. We cannot predict the size of future issuances of
our common stock or the effect, if any, that future issuances and sales of
shares of our common stock will have on the market price of our common stock.
Sales of substantial amounts of our common stock (including shares issued in
connection with an acquisition), or the perception that such sales could occur,
may adversely affect prevailing market prices for our common stock.

We presently do not intend to pay cash dividends on our common stock.

We currently anticipate that no cash dividends will be paid on the common
stock in the foreseeable future. While our dividend policy will be based on the
operating results and capital needs of the business, it is anticipated that all
earnings, if any, will be retained to finance the future expansion of the our
business. Therefore, prospective investors who anticipate the need for immediate
income by way of cash dividends from their investment should not purchase the
shares offered in this offering.

FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. These statements relate to future
events and/or future financial performance and involve known and unknown risks,
uncertainties and other factors that may cause the actual results, levels of
activity, performance or achievements of the Company or the industry in which it
operates to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by the forward-looking
statements. These risks and other factors include those listed under "Risk
Factors" and those described elsewhere in this Memorandum.

In some cases, you can identify forward-looking statements by the Company's
use of terms such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or the negative of these terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially. In evaluating these statements, you
should specifically consider various factors, including the risks outlined under
"Risk Factors." These factors may cause the Company's actual results to differ
materially from any forward-looking statement.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance, or achievements. Moreover, neither the Company
nor any other person assumes responsibility for the accuracy and completeness of
these forward-looking statements. The Company does not intend to update any of
the forward-looking statements after the date of this Memorandum to conform
prior statements to actual results.

USE OF PROCEEDS

The selling stockholders will receive all of the proceeds from any sales of
shares of our common stock. We will not receive any of the proceeds from any
such sale by any selling stockholder. See "Selling Stockholders."

PRICE RANGE OF OUR COMMON STOCK AND DIVIDEND POLICY

Shares of our common stock are traded on the National Association of
Securities Dealers Inc. Over the Counter Bulletin Board under the symbol
"PDRT.OB." Our Common Stock trades on a limited, sporadic and volatile basis. As
of August 5, 2005, the last reported sales price of our common stock on the OTC
Bulletin Board was $2.04. As of July 15, 2005, there were 20,579,545 shares of
our common stock outstanding that were held of record by 432 persons.

The following table sets forth, for the periods indicated, the range of
high and low bid information for our common stock. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may
not represent actual transactions.

Price Ranges
----------------------
High Low
----- -----
Fiscal Year Ended December 31, 2003
First Quarter...................................... 1.50 0.25
Second Quarter..................................... 1.50 0.25
Third Quarter...................................... 1.50 0.25
Fourth Quarter..................................... 1.50 0.30
Fiscal Year Ended December 31, 2004
First Quarter...................................... 0.03 0.01
Second Quarter..................................... 14.25 0.01
Third Quarter...................................... 8.15 6.50
Fourth Quarter..................................... 9.50 5.90
Fiscal Year Ended December 31, 2005
First Quarter...................................... 8.70 4.50
Second Quarter..................................... 5.50 2.46
Third Quarter (through August 5, 2005)............. 2.65 0.80

Holders of shares of common stock will be entitled to receive cash
dividends when, as and if declared by our Board of Directors, out of funds
legally available for payment thereof. However, if dividends are not declared by
our Board of Directors, no dividends shall be paid. We have not paid any
dividends on our common stock since our inception.

We do not anticipate that any cash dividends will be paid in the
foreseeable future. While our dividend policy will be based on the operating
results and capital needs of the business, we anticipate that all earnings, if
any, will be retained to finance our future expansion. Therefore, prospective
investors who anticipate the need for immediate income by way of cash dividends
from their investment should not purchase the shares offered by this prospectus.

SELECTED HISTORICAL FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and related
notes included elsewhere in this prospectus. The selected consolidated financial
data in this section is not intended to replace the consolidated financial
statements and accompanying footnotes. We were originally incorporated in 1986
and until May 2004 operated under the name "Sportan Industries, Inc." In May
2004 we acquired PharmaFrontiers Corp. and changed our name to PharmaFrontiers
Corp. For the purposes of this selected consolidated financial data, our
acquisition of PharmaFrontiers Corp. in May 2004 has been accounted for as a
reverse acquisition, which is equivalent to the issuance of stock by the
original PharmaFrontiers Corp. for our assets. Accordingly, the selected
historical financial data is that of the original PharmaFrontiers Corp. we
acquired in May 2004. The selected consolidated statements of operations data
for the period from January 22, 2003 (date of inception) to December 31, 2003
and for the year ended December 31, 2004 and the selected consolidated balance
sheet data as of December 31, 2003 and 2004 have been derived from our audited
consolidated financial statements included elsewhere in this prospectus. The
selected consolidated statements of operations for the three months ended March
31, 2004 and 2005 and the selected consolidated balance sheet data as of March
31, 2005 have been derived from the unaudited consolidated financial information
included in this prospectus. The unaudited financial information includes all
adjustments, consisting of normal recurring accruals, which we consider
necessary for a fair presentation of the results of operations for the three
month period ended March 31, 2004 and 2005. Historical results are not
necessarily indicative of the results to be expected in the future.

Period from
January 22,
2003
(date of
inception) to Year Ended Three Months Ended March 31,
December 31, December 31, ----------------------------
2003 2004 2004 2005
----------- ------------- ------------- -------------

Consolidated Statements of Operations Data:
Revenues $ -- $ -- $ -- $ --
Operating Expenses:
General and administrative 80,801 3,127,488 512,411 1,625,030
Research and development 632,621 -- 644,264

Total operating expenses 80,801 3,760,109
----------- ------------- ------------- -------------

Net operating loss (80,801) (3,760,109) (512,411) (2,269,294)

Interest Income 5,992 6,930
Other Income 2,379 2,444
Interest expense (45,202) (868,926) (30,616) (1,487,384)
----------- ------------- ------------- -------------

Net loss $ (126,003) $ (4,620,664) $ (543,027) $ (3,747,304)
=========== ============= ============= =============

Net loss per common share, basic and diluted $ N/A $ (0.73) $ (0.12) $ (0.37)
=========== ============= ============= =============

Weighted average number of common shares
outstanding, basic and diluted N/A 6,309,145 4,376,771 10,224,456
=========== ============= ============= =============

As of December 31,
-------------------------- As of March
2003 2004 31, 2005
----------- ------------ -------------
Consolidated Balance Sheet Data:
Cash and cash equivalents and prepaid expenses 68 946,329 1,840,408
Intangible assets -- 26,791,073 26,394,204
Total assets 68 28,079,386 28,583,504
Current liabilities 69,036 4,883,165 5,394,284
Common stock -- 502,992 -
Total stockholders' equity (68,968) 23,196,221 23,189,220

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of
operations should be read together with the consolidated financial statements
and related notes that are included elsewhere in this prospectus. This
discussion may contain forward-looking statements based upon current
expectations that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including those set forth under "Risk Factors",
"Disclosure Regarding Forward-Looking Statements" or in other parts of this
prospectus. We undertake no obligation to update any information in our
forward-looking statements except as required by law.

Overview

We are a development-stage company and have a limited operating history.
Our predecessor company for financial reporting purposes was formed on January
22, 2003 to acquire rights to our adult stem cell technology. In November 2004
we acquired Opexa Pharmaceuticals, Inc. and its Multiple Sclerosis treatment
technology. We are still developing all of our technology, and to date, we have
not generated any revenues from our operations. As we continue to execute our
operations plan, we expect our development and operating expenses to increase.

Research and development. We have made and expect to continue to make
substantial investments in research and development in order to develop and
market our technology. Research and development costs consist primarily of
general and administrative and operating expenses related to research and
development activities. We expense research and development costs as incurred.
Property, plant and equipment for research and development that have an
alternative future use are capitalized and the related depreciation is expensed
as research and development costs. We expect our research and development
expense to increase as we continue to invest in the development of our
technology.

General and administrative. General and administrative expenses consist
primarily of salaries and benefits, office expense, professional services fees,
and other corporate overhead costs. We anticipate increases in general and
administrative expenses as we continue to develop and prepare for
commercialization of our technology

Results of Operations

Comparison of Three Months Ended March 31, 2005 with Three Months Ended March
31, 2004

Net Sales. We recorded no sales for the three months ended March 31, 2005
which resulted in no change from the same period in 2004.

General and Administrative Expenses. Our general and administrative
expenses increased to $1,625,030 during the three months ended March 31, 2005,
as compared to $512,411 from the same period in 2004. The increase in general
and administrative expenses is due primarily to the start-up of operations which
included the hiring of new personnel including employees and directors and
scientific advisory board members. These individuals have agreements with the
Company which provide for salary payments. The increase in operations is also
attributable to the acquisition of Opexa Pharmaceuticals and the assumption of
its operations. Also included are professional fees incurred from legal,
accounting, and consulting services. Anticipated future expenses include
expenses associated with the expansion of facilities.

Research and Development Expenses. Research and development expense
increased to $644,264 for the three months ended March 31, 2005, compared to $ 0
from the same period in 2004. The increase is primarily related to the
acquisition of Opexa Pharmaceuticals and the assumption of its operations and
research and development programs, including its ongoing Phase I/II Clinical
Trial for Tovaxin as well as the beginning of the pre-clinical studies for our
cardiac and diabetes stem cell therapies. Also included are professional fees
incurred from consulting services and legal fees to secure and expand our
license patent claims. Anticipated future expenses include expenses associated
with the expansion of the laboratory/manufacturing facilities.

Interest Expense. Interest expense increased to $1,487,384 for the three
months ended March 31, 2005, as compared to $30,616 from the same period in
2004. The increase is primarily related to the accrued interest on the 15%
Exchangeable Convertible Subordinated Notes. Interest accrued on those Notes at
a rate of 15% per annum. The Notes are mandatorily exchangeable for securities
at the earlier of an Equity Financing (as defined below) or upon maturity on
November 30, 2005. The Notes and accrued interest are convertible at a purchase
price equal to the weighted average gross offering price of the Company common
stock or common stock equivalents issued in an Equity Financing. If no such
Equity Financing occurs, the Notes and accrued interest are convertible at $3.00
per share. An Equity Financing is defined as a Company raise of at least
$10,000,000 in one or a series of transactions of common stock or common stock
equivalent securities prior to the maturity of the Notes. Interest will be paid
in cash or at the option of the Company, in shares of common stock valued at
$3.00 per share.

Net loss. The Company had a net loss for the three months ended March 31,
2005, of ($3,747,304), or ($0.37) per share (basic and diluted), compared with a
net loss of ($543,027), or ($0.12) per share (basic and diluted), from the same
period in 2004. The primary reason for the increase in net loss is due to the
start-up of operations which included the hiring of new personnel including
employees and directors and scientific advisory board members. These individuals
have agreements with us which provide for salary payments. The increase in net
loss is also attributable to the acquisition of Opexa Pharmaceuticals and the
assumption of its operations and research and development programs. Also
included are professional fees incurred from legal, accounting, and consulting
services to secure and expand our license patent claims. Anticipated future
expenses include research and development, professional and consulting fees, and
expenses associated with the expansion of the office and
laboratory/manufacturing facilities.

Comparison of Year Ended December 31, 2004 with the Period from January 22, 2003
(date of inception) to December 31, 2003

Net Sales. We recorded no sales for the twelve months ended December 31,
2004 or the period ended December 31, 2003.

General and Administrative Expenses. Our general and administrative
expenses increased during the twelve months ended December 31, 2004, to
$3,127,488 as compared to $80,801 from January 22, 2003 (inception) to December
31, 2003. The increase in general and administrative expenses is due primarily
to the start-up of operations which included the hiring of new personnel
including employees and directors and scientific advisory board members. These
individuals have agreements with the Company which provide for salary payments.
The increase in operations is also attributable to the acquisition of Opexa
Pharmaceuticals and the assumption of its operations and research and
development programs. Also included are professional fees incurred from legal,
accounting, and consulting services to secure and expand our license patent
claims as well as license milestone fees to the University of Chicago. Such
anticipated future expenses may include research and development, professional
and consulting fees, and expenses associated with manufacturing facilities.

Research and Development Expense. Research and development expense
increased to 632,621 for the twelve months ended December 31, 2004, compared to
$ 0 from inception to December 31, 2003. The increase is primarily related to
the acquisition of Opexa Pharmaceuticals and its ongoing Phase I/II Clinical
Trial for Tovaxin as well as the beginning of the pre-clinical studies for our
cardiac and diabetes stem cell therapies.

Interest Expense. Interest accrued on the Notes at a rate of 15% per annum.

Net loss. We had a net loss for the year ended December 31, 2004, of
$4,620,664 or ($.73) per share (basic and diluted), compared with a net loss of
$126,003, from inception to December 31, 2003. The primary reason for the
increase in net loss is due to the start-up of operations which included the
hiring of new personnel including employees and directors and scientific
advisory board members. These individuals have agreements with us which provide
for salary payments. The increase in net loss is also attributable to the
acquisition of Opexa Pharmaceuticals, Inc. and the assumption of its operations
and research and development programs. Also included are professional fees
incurred from legal, accounting, and consulting services to secure and expand
our license patent claims as well as license milestone fees to the University of
Chicago. Such anticipated future expenses may include research and development,
professional and consulting fees, and expenses associated with manufacturing
facilities.

Liquidity and Capital Resources

Since our inception, we have financed our operations from the sale of our
debt and equity securities (including the issuance of its securities in exchange
for goods and services).

During the six months ended February 15, 2005, we privately placed an
aggregate principal amount of $6.1 million of 15% Exchangeable Convertible
Subordinated Notes; with these notes we also issued rights to receive warrants
and 612,688 shares of common stock. The notes and the rights to receive warrants
were exchanged on June 30, 2005 for (i) an aggregate of 5,695,015 shares of our
common stock, (ii) Series A Warrants to purchase an aggregate of 5,577,523
shares of our common stock, (iii) Series B Warrants to purchase an aggregate of
7,231,009 shares of our common stock, and (iv) Series C Warrants to purchase an
aggregate of 4,462,018 shares of our common stock. The terms of the Series A
Warrants, Series B Warrants and Series C Warrants are described in this
prospectus under "Description of Securities."

During the month ended July 15, 2005, we raised gross proceeds of 5,841,764
through a private placement of (i) an aggregate of 3,894,509 shares of our
common stock, (ii) Series A Warrants to purchase an aggregate of 4,868,136
shares of our common stock, (iii) Series B Warrants to purchase an aggregate of
1,947,255 shares of our common stock, and (iv) Series C Warrants to purchase an
aggregate of 3,894,509 shares of our common stock.

As of July 15, 2005, we had cash of $5,696,938. We believe we have
sufficient cash to fund current operations through 2005. Our burn rate in the
first quarter of 2005 was $500,000 per month. As our operations ramp up, our
burn rate is expected to increase to $650,000 per month in the second through
the fourth quarters of 2005. We believe that we will need a minimum of
$7,700,000 to fund our operations for fiscal 2005. This money will be used for
research and development and for general and administrative expenses. Failure to
raise necessary working capital will cause us to curtail operations.

Contractual Commitments

We have exercised our option with the landlord of our facilities to renew
the lease on our executive offices and research facilities for a term of five
years with an option for an additional five years at the then prevailing market
rate. We are waiting on final construction pricing in order to finalize the
rental rate on the lease renewal.

In our acquisition of Opexa Pharmaceuticals, Inc. in November 2004, we
assumed a lease on a 32,041 square foot office/warehouse facility used as
Opexa's headquarters located in Houston, Texas. We determined that this facility
was unsuitable for future expansion and we negotiated a lease termination
agreement which terminated the remaining eight year obligation and reduced the
annual facility expenses by $215,000. The lease termination required a final
monthly lease payment for February 2005, surrender of the security deposit in
the amount of $15,380, and a lease termination fee of $56,763. The agreement
also contains mutual release provisions releasing both parties from any claims
each may hold against the other under the lease dated on or about May 31, 2002.

Off-Balance Sheet Arrangements

As of March 31, 2004, we had no off-balance sheet arrangements.

Related Party Transactions

For more information on these transactions, please read "Certain
Relationships and Related Party Transactions." in this prospectus.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of
operations is based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities and expenses. We base our estimates on historical
experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. We believe the following
critical accounting policies affect our most significant judgments and estimates
used in preparation of our consolidated financial statements.

Reverse Acquisition. We treat the merger of PharmaFrontiers Corp. into
Sportan as a reverse acquisition. Pursuant to the guidance in Appendix B of SEC
Accounting Disclosure Rules and Practices Official Text, the "merger of a
private operating company into a non-operating public shell corporation with
nominal net assets typically results in the owners and management of the private
company having actual or effective operating control of the combined company
after the transaction, with the shareholders of the former public shell
continuing only as passive investors. These transactions are considered by the
staff to be capital transactions in substance, rather than business
combinations. That is, the transaction is equivalent to the issuance of stock by
the private company for the net monetary assets of the shell corporation,
accompanied by a recapitalization." Accordingly, the reverse acquisition has
been accounted for as a recapitalization. For accounting purposes, the original
PharmaFrontiers Corp. is considered the acquirer in the reverse acquisition. The
historical financial statements are those of the original PharmaFrontiers Corp.
Earnings per share for periods prior to the merger are restated to reflect the
number of equivalent shares received by the acquiring company.

Impairment of Long-Lived Assets. We review long-lived assets and certain
identifiable assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. If the sum
of the expected future undiscounted cash flows is less than the carrying amount
of the asset, further impairment analysis is performed. An impairment loss is
measured as the amount by which the carrying amount exceeds the fair value of
assets.

Stock-Based Compensation. We have adopted FAS No. 123, "Accounting for
Stock-Based Compensation" for non-cash stock-based compensation issued to
employees, directors and non-employees for goods or services. FAS No. 123 allows
companies to continue to measure compensation costs for employees and directors
using the intrinsic value method as prescribed by APB Opinion 25; however, the
fair value method must be used to measure compensation costs issued to
non-employees. FAS No. 123 states that the fair value method of accounting for
stock-based compensation is preferable to the intrinsic value method; therefore,
we use the fair value method to measure all stock-based compensation, including
stock-based compensation to our employees and directors. Under this method,
compensation cost is measured at the fair value of the award on the applicable
measurement date. See Note 1 of the Notes to Consolidated Financial Statements
for the pro forma net income and net income per share amounts, for Fiscal 2003
through Fiscal 2004, as if the Company had used a fair-value-based method
similar to the methods required under SFAS 123R to measure compensation expense
for employee stock incentive awards. The Company is evaluating the terms and
structure of its current share based payments and does not expect the adoption
to have a significant, adverse impact on the consolidated statements of income
and net income per share as it relates to current granted options and warrants
as of the date of the adoption.

Consolidation of Variable Interest Entities. In January 2003, the FASB
issued Interpretation No. 46(R) ("FIN 46"), Consolidation of Variable Interest
Entities. FIN 46 addresses consolidation by business enterprises of variable
interest entities (formerly special purpose entities). In general, a variable
interest entity is a corporation, partnership, trust or any other legal
structure used for business purposes that either (a) does not have equity
investors with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. The
objective of FIN 46 is not to restrict the use of variable interest entities,
but to improve financial reporting by companies involved with variable interest
entities. FIN 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. The consolidation requirements are effective
for the first period that ends after March 15, 2004; the Company elected to
adopt the requirements effective for the reporting period ending December 31,
2004. The adoption of FIN 46 had no effect on the consolidated financial
statements.

Research and Development. The costs of materials and equipment or
facilities that are acquired or constructed for research and development
activities and that have alternative future uses are capitalized as tangible
assets when acquired or constructed. The cost of such materials consumed in
research and development activities and the depreciation of such equipment or
facilities used in those activities are research and development costs. However,
the costs of materials, equipment, or facilities acquired or constructed for
research and development activities that have no alternative future uses are
considered research and development costs and are expensed at the time the costs
are incurred.

OUR BUSINESS

Overview

Two clinical studies of Tovaxin(TM) have reached critical milestones:

We intend to submit data from these two clinical studies to the FDA for
approval to commence a pivotal Phase IIb study in the fourth quarter of 2005.

Our stem cell technology allows us to create adult pluripotent stem cells
from monocytes isolated from blood drawn from the patient. We believe that these
stem cells, if successfully developed, may provide the basis for therapies to
treat a variety of diseases and conditions. We anticipate that our stem cell
technology will have a significant competitive advantage over many of the other
stem cell technologies. The peripheral blood monocytes, used by our technology
to produce stem cells, have the advantage of being relatively abundant and easy
and cost effective to obtain. Our technology does not have the collection and
storage difficulties presented by umbilical cord blood or the controversial
ethical and regulatory issues associated with embryonic stem cells. In addition,
our technology is less difficult and less risky than collecting adult stem cells
from tissues such as bone marrow, spinal fluid or adipose (fat) tissue.
Furthermore, our stem cells are pluripotent, whereas other adult stem cells are
not likely to be pluripotent.

Our stem cell technology will also avoid rejection issues because it is
autologous ("self"). This is as opposed to the embryonic, umbilical, and some
adult stem cell technologies, which must be taken from one individual and given
to another. Further, we believe our stem cell therapies will be regulated as
autologous "manipulated" non-homologous use cell therapies. Thus, we use an
individuals' own stem cells, and we therefore do not expect to encounter the
same significant pre-clinical and clinical development regulatory hurdles that
embryonic, umbilical, and some adult stem cells therapies are expected to face.

A structural outline of the Company's technical program is provided below.

- --------------------------------------------------------------------------------
Autologous Cell-Based Therapies
- --------------------------------------------------------------------------------
Adult Pluripotent Stem Cell Therapy T Cell Therapy
- --------------------------------------------------------------------------------
Cardiac Therapy Diabetes Therapy Multiple Sclerosis Multiple Sclerosis
Therapy Diagnosis
- --------------------------------------------------------------------------------
Other Therapies Blood
o Macular Degeneration Banking
o Stroke
o Parkinson's
- --------------------------------------

Organizational History

The Company was incorporated in Texas in 1986 and originally engaged in
businesses other than the biopharmaceutical business. These other business
operations were terminated in February 2002. In May 2004, we entered the
biopharmaceutical business by acquiring PharmaFrontiers Corp. which held rights
to treatments using adult pluripotent stem cells derived from adult human
peripheral blood. On November 5, 2004, we acquired Opexa Pharmaceuticals, Inc.,
which holds rights to technology to diagnose and treat multiple sclerosis
through modified autoreactive T cells.

Our T cell Based Therapy

Multiple Sclerosis Therapy.

Our T cell based therapy for the treatment of multiple sclerosis is called
"Tovaxin(TM)." Multiple sclerosis is caused by myelin peptide reactive T cells
destroying the myelin sheath coating of the axons in the central nervous system.
Depletion of the myelin peptide reactive T cells would theoretically stop
disease progression and in some cases may allow the myelin sheath repair
mechanism to be effective and potentially lead to remission and possibly reverse
the effects of multiple sclerosis. Repair mechanisms are more likely to occur
early in the disease process and are likely to be more robust in the younger
patient. A completed 114-patient clinical study conducted by Dr. Jingwu Zhang at
Baylor College of Medicine has demonstrated that the depletion of myelin basic
protein (MBP) reactive T cells was beneficial to patients with multiple
sclerosis. These investigations resulted in the development of Tovaxin(TM),
which includes the modified MBP reactive T cells, proteolipid protein (PLP) and
myelin oligodendrocyte glycoprotein (MOG) reactive T cells as well.

Tovaxin(TM) has some advantages over existing treatments for multiple
sclerosis. Tovaxin(TM) is individualized, easier to tolerate, and has the
potential to place the disease into remission, and possibly to reverse the
effects of multiple sclerosis.

Multiple Sclerosis Diagnostic

In addition, to using our T cell technology to develop a therapy for
multiple sclerosis, we are also using it to develop a diagnostic test for
multiple sclerosis. Multiple sclerosis is difficult to diagnose and there is no
existing reliable confirmatory diagnostic test. Based on preliminary evidence we
believe that the presence of myelin peptide reactive T cells in the blood may
have a high correlation as to whether an individual may develop or has multiple
sclerosis. We have initiated a proof of concept clinical study that, if
successful, will be expanded into a major clinical study in 2005. If the larger
study produces favorable results, we plan to further develop a diagnostic test
for sale in the near future.

Applications of Our T cell Technology to Other Diseases

Recent advances in the understanding of basic mechanisms of autoimmune
disease have led to the development of reagents that can potentially interfere
with the disease process and limit disease progression. Some of these
therapeutics have been proven effective in the treatment of autoimmune
conditions. Although our initial focus is T cell therapy for the treatment and
management of multiple sclerosis, several autoimmune diseases including
inflammatory bowel disease, diabetes, systemic lupus and rheumatoid arthritis
may be candidates for potential treatment with our technology in the future.

Our T cell Therapy Process

Our cell therapy is similar to that of traditional microbial vaccination
where modified infectious agents are used to stimulate protective immune
responses. In preparing a T cell therapy, the T cells causing the disease are
taken from the blood, specifically identified and expanded ex vivo by incubating
T cells with MBP, PLP and MOG selected peptides in the presence of antigen
presenting cells and growth factors. Selected T cells are grown to therapeutic
levels and cryopreserved. Prior to use, the T cells are expanded, formulated and
modified to render them replication incompetent but viable. These modified T
cells are administered subcutaneously as a primary series of injections.
Retreatment of patients follows the primary series approximately six months to
one year later.

Our Pluripotent Adult Stem Cell Therapies

Our Cardiac Stem Cell Therapy Program

Stem cell treatment of congestive heart failure would revolutionize
treatment of the disease because it would treat the source of the problem by
replacing diseased cardiac muscle tissue with stem cells that grow into new
healthy cardiac tissue. Other companies have conducted human clinical trials
involving the use of stem cells derived from bone marrow to regenerate cardiac
tissue and improve cardiac function. These clinical trials by other companies
have treated over 70 patients with their own bone marrow stem cells and have
shown increased cardiac perfusion. We plan to move expeditiously through
pre-clinical development of our cardiac stem cell therapy and, if successful,
initiate human testing in 2006.

Our Diabetes Stem Cell Therapy Program

Type 1 diabetes is a chronic disease, caused by the loss of functioning
islet cells that produce insulin, for which there is no cure. Frequent testing
of glucose levels coupled with insulin injections are used to control the
disease but do not address the underlying cause. The medical community has tried
to treat the cause and cure the disease by implanting functioning islet cells,
harvested from cadavers, into the pancreas. However, the supply of these cells
from cadavers is limited and the patient must be placed on a regime of
anti-rejection drugs. We believe that with our stem cell technology plus our
additional technology related to the differentiation of stem cells into islet
cells, we will be able to create insulin producing islet cells derived from the
patient's own blood. We are currently conducting laboratory tests and plan to
move expeditiously through pre-clinical development of our diabetes stem cell
therapy and, if successful, initiate human testing in 2006.

Blood Banking Business

We are assessing the feasibility of operating a blood banking business
designed to provide individuals with a process for storing blood to be used
later if they need treatment by our stem cell technology. As individuals age, it
is possible that the number of available monocytes per blood draw will decrease,
thus creating a demand for the cryopreservation of stem cells from healthy and
relatively young adults. As the volume of stem cell treatments increase, there
may be a demand from patients for the storage of their adult stem cells isolated
from single blood draws. We are reviewing the potential establishment of a stem
cell cyropreservation service.

Other Applications For Our Stem Cell Technology

We plan to conduct basic research to determine the potential use of adult
stem cells created with our technology in other indications such as macular
degeneration, stroke, and Parkinson's disease. Liver cells (hepatocytes) derived
from our stem cells may be valuable across the biopharmaceutical industry to
test for drug toxicity or to help cure liver diseases. We intend to partner or
sublicense some of these indications if they are not pursued for internal
development. For those indications, which we believe we can participate
commercially, we expect to take partners in key commercial markets outside of
the United States. Alternatively, we may form a broad alliance with a
pharmaceutical or biotechnology company for the entire technology platform and
therapeutic areas.

Our Stem Cell Therapy Process

Our stem cell therapy process commences with blood being drawn from the
patient in a typical blood drawing process. The blood is then processed to
obtain monocytes (white blood cells). These monocytes can be dedifferentiated in
the presence of certain growth factors to form stem cells. The resulting stem
cells with macrophage-like characteristics can be expanded and differentiated
into other cell types when cultured in the presence of the appropriate growth
factors. Researchers have been able to turn these dedifferentiated monocytes
into several different types of cells including islet cells, nerve cells, liver
cells, blood vessel cells and skin cells.

We estimate that from a 500 ml blood collection, the maximum allowable
blood draw in one sitting, we will be able to produce approximately 10 to 100
million monocyte derived stem cells. This number of stem cells is considerably
greater than current stem cell dosing requirements under study in human clinical
studies by other companies and institutions. Consequently, we expect that we may
be able to produce multiple therapeutic doses from a single blood draw using
cryopreservation.

We anticipate that the patient's blood will be drawn at the patient's
hospital or doctor's office and shipped to us with a proprietary collection kit.
At our GMP (current good manufacturing process) manufacturing facility, the
monocytes will be processed to create stem cells and their progeny with the
proper concentration and characteristics. Cells will then be cryopreserved until
needed for treatment, transported to the patient's physician, and injected into
the diseased organ with the approved delivery system.

Sources of Stem Cells and Our Competitive Advantages

Cells are the basic unit of the tissues that comprise the human body. Each
type of tissue has a functional use to the human body. Stem cells are
non-specialized cells that have not yet differentiated into specific cells with
a particular function in the human body. These non-specialized cells are able to
continue to divide and regenerate for periods of time through cell division.
Pluripotent stem cells have the property of being able to differentiate into all
the different specialized cells that make up the individual tissues of the body.

We believe that there are currently three sources of stem cells: human
embryos, umbilical cord blood and certain adult tissues:

o Every human begins life when a single cell, the zygote, is formed
after fertilization. About five days after conception, a tiny ball of
cells has formed, this is known as the blastocyst. The inner cells of
the blastocyst are known as embryonic stem cells. These stem cells are
pluripotent; that is they can develop into a wide variety of cell
types in the human body. These embryonic stem cells are the stem cells
over which a great deal of ethical and scientific controversy has
ensued, leading up to President Bush's September 2001 ban on Federal
funding for any new embryonic stem cell lines. PharmaFrontiers does
not use embryonic stem cells.

o Another source of stem cells is the umbilical cord blood of a newborn
baby, which contains pluripotent stem cells. The umbilical cord is the
tissue that ties a baby to the mother within the womb. After the baby
is born the blood can be collected from the umbilical cord and
cryopreserved. Most candidates for stem cell therapy today did not
have their umbilical cord blood frozen, so to use this technology,
like the embryonic stem cells above, they must use the stem cells from
other individuals and must address rejection issues. We use an
individuals' own stem cells, and thus we do not expect to encounter
the same significant pre-clinical and clinical development regulatory
hurdles that embryonic, umbilical, and certain adult stem cells
therapies are expected to face.

o Stem cells obtained from a person after birth are called adult stem
cells and are found within various tissues that make up the body.
Adult stem cells are usually programmed to form a limited number of
different cell types of their own tissue, and are classified as
"multipotent" meaning they are only able to create several different
types of cells within the same type of tissue. Our stem cells are
pluripotent and can be differentiated into a wider variety of
different tissue types. In addition, collecting adult stem cells from
tissues such as bone marrow, spinal fluid or adipose (fat) tissue, can
involve complicated, painful, and expensive surgical procedures,
whereas our technology is simple, cost effective, and convenient to
the patient.

Licenses, Patents and Proprietary Rights

We believe that proprietary protection of our technologies will be critical
to the development of our business. We intend to protect our proprietary
intellectual property through patents and other appropriate means. We rely upon
trade-secret protection for some confidential and proprietary information and
take active measures to control access to that information. We currently have
non-disclosure agreements will all of our employees.

The Company's intellectual property strategy includes developing
proprietary technology for the sourcing, scale up, manufacturing, and storage of
T cells and pluripotent adult stem cells and the use of these cells in multiple
therapeutic applications. This strategy will include expanding on technologies
in-licensed to us as well as in-licensing additional technologies through
collaborations with universities and biotech companies.

We have licenses to certain patents that relate to our T cell technology
and our pluripotent adult stem cell technology.

T Cell Therapy IP

We have an exclusive, worldwide license from the Baylor College of Medicine
to patent applications claiming rights to the treatment of multiple sclerosis
using modified T cells and to the use of the T cell technology as a diagnostic.
Under the Baylor license we are obligated to pay a percentage of net sales of
products subject to the licensed patents.

Stem Cell Therapy IP

We have an exclusive, worldwide license from the University of Chicago to a
patent application claiming rights to the development of adult pluripotent stem
cells from monocytes isolated from adult human peripheral blood. The technology
was developed at the Argonne National Laboratory, a U.S. Department of Energy
Laboratory operated by the University of Chicago.

Pursuant to the license we have issued a total of 534,624 shares of our
common stock to the University of Chicago. We have also agreed to pay the
University of Chicago $1.5 million upon the earlier of October 30, 2005 or our
raising $10 million or more in any financing. We are also obligated to issue to
the University of Chicago sufficient additional shares of common stock so that
the University holds a total of 2.6% of our outstanding stock after the later of
November 30, 2005 or our raising $10 million or more in any financing. We have
agreed to pay a percentage of royalties on sales of products subject to the
licensed patents, as well as sublicense fees. In addition, the University of
Chicago license requires us to expend on research and development at least
$2,000,000 within two (2) years of the execution of the license and at least an
additional $4,000,000 within four (4) years of the execution of the license.
Research and development expenditures by sublicensees may account for half of
each amount. Failure to meet the above criteria may result in the license being
amended to restrict the grant to only: (a) an exclusive license in two cell
therapy areas, and (b) a non-exclusive license in the remaining cell areas. The
license also requires us to sell a product or method based on the licensed
technology by February 2011.

Research Collaborations

We anticipate that from time to time in the future we will enter into
collaborative research agreements with other academic and research institutions.
We will use such agreements to enhance our research capabilities. Typically, in
the industry, such agreements provide the industry partner with rights to
license the intellectual property created through the collaboration. We may also
enter into collaborative research agreements with other pharmaceutical companies
when we believe such collaboration will support the development and
commercialization of our technology.

Commercialization Through Third Party

We anticipate that we will grant sublicenses for certain applications of
our technologies. We believe that by sublicensing some of the rights to our
technology to pharmaceutical companies and other third parties, we will be able
to more efficiently develop some applications of our technologies. We currently
do not have any sublicenses.

Competition

The development of therapeutic and diagnostic agents for human disease is
intensely competitive. Major pharmaceutical companies currently offer a number
of pharmaceutical products to treat heart attack, stroke, Parkinson's disease,
diabetes, liver diseases, arthritis and other diseases for which our
technologies may be applicable. Many pharmaceutical and biotechnology companies
are investigating new drugs and therapeutic approaches for the same purposes,
which may achieve new efficacy profiles, extend the therapeutic window for such
products, alter the prognosis of these diseases, or prevent their onset. We
believe that our products, when and if successfully developed, will compete with
these products principally on the basis of improved and extended efficacy and
safety and their overall economic benefit to the health care system. We expect
competition to increase. We believe that our most significant competitors will
be fully integrated pharmaceutical companies and more established biotechnology
companies. Smaller companies may also be significant competitors, particularly
through collaborative arrangements with large pharmaceutical or biotechnology
companies. Some of our primary competitors in the current treatment of and in
the development of treatments for multiple sclerosis include Biogen, Elan,
Serono, Aventis, Teva, and Schering AG. Some of our primary competitors in the
development of stem cell therapies include Aastrom Biosciences, Geron,
Gamida-Cell Ltd, Stem Cells Inc., Cellerant Therapeutics, Viacell, and Osiris
Therapeutics. Many of these competitors have significant products in development
that could be competitive with our potential products.

Sales and Marketing

We intend to develop a sales force to market our multiple sclerosis cell
therapy and diagnostic products in the U.S. Given the concentration of multiple
sclerosis among a relatively small number of specialized neurologists, we
believe that a modest size sales force would be sufficient to market the
multiple sclerosis products. Our plan is to start building the sales force with
the launch of the multiple sclerosis diagnostic products.

We expect to partner with large biotech and pharmaceutical companies for
the marketing and sales of our stem cell therapy products.

Description of Property

Our principal executive offices are located at 2408 Timberloch Place, Suite
B-7, The Woodlands, Texas, and our telephone number is (281) 272-9331. Our
facilities are leased pursuant to operating leases for various terms. We believe
that our lease is at a competitive or market rate and do not anticipate any
difficulty in leasing suitable additional space upon expiration of our current
lease term.

The Company conducts its research and development and clinical
manufacturing in this 6,700 sq. ft. Woodlands facility. The components of the
manufacturing facility are a small gowning area, a common service area, and a
GMP production suite for the manufacture of T cell and stem cell therapies with
sufficient capacity for Phase I quantity products. The Company intends to build
a 1200 sq. ft. pilot facility for approximately $1 million which will provide
the necessary manufacturing capacity for Phase II & III clinical trials.

Government Regulation

Our research and development activities and the future manufacturing and
marketing of our potential products are, and will be, subject to regulation for
safety and efficacy by a number of governmental authorities in the United States
and other countries.

In the United States, pharmaceuticals, biologicals and medical devices are
subject to Food and Drug Administration or FDA, regulation. The Federal Food,
Drug and Cosmetic Act, as amended, and the Public Health Service Act, as
amended, the regulations promulgated thereunder, and other Federal and state
statutes and regulations govern, among other things, the testing, manufacture,
safety, efficacy, labeling, storage, export, record keeping, approval,
marketing, advertising and promotion of our potential products. Product
development and approval within this regulatory framework takes a number of
years and involves significant uncertainty combined with the expenditure of
substantial resources.

FDA Approval

We will need to obtain FDA approval of any therapeutic product we plan to
market and sell. The steps required before our potential products may be
marketed in the United States include:

1. Preclinical Laboratory and Animal Tests. Preclinical tests include
laboratory evaluation of the product and animal studies in specific disease
models to assess the potential safety and efficacy of the product and our
formulation as well as the quality and consistency of the manufacturing process.

2. Submission to the FDA of an Application for an Investigational New Drug
Exemption, or IND, Which Must Become Effective Before U.S. Human Clinical Trials
May Commence. The results of the preclinical tests are submitted to the FDA as
part of an IND, and the IND becomes effective 30 days following its receipt by
the FDA, as long as there are no questions, requests for delay or objections
from the FDA.

3. Adequate and Well-Controlled Human Clinical Trials to Establish the
Safety and Efficacy of the Product. Clinical trials involve the evaluation of
the product in healthy volunteers or, as may be the case with our potential
products, in a small number of patients under the supervision of a qualified
physician. Clinical trials are conducted in accordance with protocols that
detail the objectives of the study, the parameters to be used to monitor safety
and the efficacy criteria to be evaluated. Any product administered in a U.S.
clinical trial must be manufactured in accordance with clinical good
manufacturing practices, or GMP, determined by FDA. Each protocol is submitted
to the FDA as part of the IND.

The protocol for each clinical study must be approved by an independent
Institutional Review Board, or IRB, at the institution at which the study is
conducted and the informed consent of all participants must be obtained. The IRB
will consider, among other things, the existing information on the product,
ethical factors, the safety of human subjects, the potential benefits of the
therapy and the possible liability of the institution.

Clinical development is traditionally conducted in three sequential phases,
which may overlap:

o In Phase I, products are typically introduced into healthy human
subjects or into selected patient populations to test for adverse
reactions, dosage tolerance, absorption and distribution, metabolism,
excretion and clinical pharmacology.

o Phase II involves studies in a limited patient population to (i)
determine the efficacy of the product for specific targeted
indications and populations, (ii) determine optimal dosage and dosage
tolerance and (iii) identify possible adverse effects and safety
risks. When a dose is chosen and a candidate product is found to be
effective and to have an acceptable safety profile in Phase II
evaluations, Phase III trials begin.

o Phase III trials are undertaken to conclusively demonstrate clinical
efficacy and to test further for safety within an expanded patient
population, generally at multiple study sites.

The FDA continually reviews the clinical trial plans and results and may
suggest changes or may require discontinuance of the trials at any time if
significant safety issues arise.

1. Submission to the FDA of Marketing Authorization Applications. The
results of the preclinical studies and clinical studies are submitted to the FDA
in the form of marketing approval authorization applications.

2. FDA Approval of the Application(S) Prior to Any Commercial Sale or
Shipment of the Drug Biologic Product Manufacturing Establishments Located in
Certain States Also May be Subject to Separate Regulatory and Licensing
Requirement. The testing and approval process will require substantial time,
effort and expense. The time for approval is affected by a number of factors,
including relative risks and benefits demonstrated in clinical trials, the
availability of alternative treatments and the severity of the disease.
Additional animal studies or clinical trials may be requested during the FDA
review period, which might add to that time.

After FDA approval for the product, the manufacturing and the initial
indications, further clinical trials may be required to gain approval for the
use of the product for additional indications. The FDA may also require unusual
or restrictive post-marketing testing and surveillance to monitor for adverse
effects, which could involve significant expense, or may elect to grant only
conditional approvals.

FDA Manufacturing Requirements

Among the conditions for product licensure is the requirement that the
prospective manufacturer's quality control and manufacturing procedures conform
to the FDA's current good manufacturing practices, or GMP, requirement. Even
after product licensure approval, the manufacturer must comply with GMP on a
continuing basis, and what constitutes GMP may change as the state of the art of
manufacturing changes. Domestic manufacturing facilities are subject to regular
FDA inspections for GMP compliance, which are normally held at least every two
years. Foreign manufacturing facilities are subject to periodic FDA inspections
or inspections by the foreign regulatory authorities with reciprocal inspection
agreements with the FDA. Domestic manufacturing facilities may also be subject
to inspection by foreign authorities.

Fast Track, Priority Review and Accelerated Approval

Fast Track refers to a process for interacting with the FDA during drug
development. Priority Review applies to the time frame the FDA targets for
reviewing a completed application. Accelerated Approval (Subpart H) applies to
the design and content of the studies used to support a marketing claim.

Fast Track is a formal mechanism to interact with the FDA using approaches
that are available to all applicants for marketing claims. The Fact Track
mechanism is described in the Food and Drug Administration Modernization Act of
1997. The benefits of Fast Track include scheduled meetings to seek FDA input
into development plans, the option of submitting a New Drug Application (NDA) in
sections rather than all components simultaneously, and the option of requesting
evaluation of studies using surrogate endpoints as discussed below. The Fast
Track designation is intended for the combination of a product and a claim that
addresses an unmet medical need, but is independent of Priority Review and
Accelerated Approval. An applicant may use any or all of the components of Fast
Track without the formal designation. Fast Track designation does not
necessarily lead to a Priority Review or Accelerated Approval.

Priority Review is a designation for an application after it has been
submitted to the FDA for review for approval of a marketing claim. Under the
Food and Drug Administration Modernization Act of 1997, reviews for New Drug
Applications, or NDAs, are designated as either Standard or Priority. A Standard
designation sets the target date for completing all aspects of a review and the
FDA taking an action on the application (approve or not approve) at 10 months
after the date it was filed. A Priority designation sets the target date for the
FDA action at 6 months. A Priority designation is intended for those products
that address unmet medical needs.

Accelerated Approval or Subpart H Approval is a program described in the
NDA regulations that is intended to make promising products for life threatening
diseases available on the market on the basis of preliminary evidence prior to
formal demonstration of patient benefit. The studies are designed to measure and
the FDA evaluation is performed on the basis of a surrogate marker (a
measurement intended to substitute for the clinical measurement of interest,
usually prolongation of survival) that is considered likely to predict patient
benefit. The approval that is granted may be considered a provisional approval
with a written commitment to complete clinical studies that formally demonstrate
patient benefit. The Federal Register published a discussion of Accelerated
Approval with comments. Absent a formal demonstration of patient benefit, a risk
benefit assessment cannot be made. Accelerated Approval designation does not
necessarily lead to a Priority Review.

Proposed FDA Regulations

The FDA is requiring human cell, tissue, and cellular and tissue-based
product (HCT/P) establishments to follow current good tissue practice, which
governs the methods used in, and the facilities and controls used for, the
manufacture of HCT/Ps; recordkeeping; and the establishment of a quality
program. The agency is also issuing new regulations pertaining to labeling,
reporting, inspections, and enforcement that will apply to manufacturers of
HCT/Ps regulated solely under the authority of the Public Health Service Act,
and not as drugs, devices, and/or biological products.

As part of this approach, the FDA has published final rules for
registration of establishments that engage in the recovery, screening, testing,
processing, storage or distribution of human cells, tissues, and cellular and
tissue-based products, and for the listing of such products. These products
specifically include stem cells that are progenitors of blood cells; however,
the FDA makes no explicit statement regarding the inclusion of other types of
stem cells. In addition, the FDA has published proposed rules for making
suitability determinations for donors of cells and tissue and for current good
tissue practice for manufacturers using them. We cannot now determine the full
effects of this regulatory initiative, including precisely how it may affect the
clarity of regulatory obligations and the extent of regulatory burdens
associated with pluripotent adult stem cell research (for stem cells that give
rise to various tissue types, including blood), and the manufacture and
marketing of adult stem cell products.

Other Regulations

In addition to safety regulations enforced by the FDA, we are also subject
to regulations under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act and other present and potential
future foreign, Federal, state and local regulations.

Outside the United States, we will be subject to regulations that govern
the import of drug products from the United States or other manufacturing sites
and foreign regulatory requirements governing human clinical trials and
marketing approval for our products. The requirements governing the conduct of
clinical trials, product licensing, pricing and reimbursements vary widely from
country to country. In particular, the European Union is revising its regulatory
approach to high tech products, and representatives from the United States,
Japan and the European Union are in the process of harmonizing and making more
uniform the regulations for the registration of pharmaceutical products in these
three markets.

Employees.

As of June 1, 2005, we had 17 full time employees. We believe that our
relations with our employees are good. None of our employees is represented by a
union or covered by a collective bargaining agreement.

Legal Proceedings.

We are not currently a party to any legal proceedings.

MANAGEMENT

The following table sets forth certain information regarding the Company's
current directors and executive officers.

The Company's executive officers are elected by the board of directors and
serve at the discretion of the board. All of the current directors serve until
the next annual stockholders' meeting or until their successors have been duly
elected and qualified.

Name Age Position

David B. McWilliams...................... 61 President and Chief Executive Officer, Director
Robert H. Gow............................ 71 Chairman of the Board
C. William Rouse......................... 57 Chief Financial Officer
Jim C. Williams.......................... 61 Chief Operating Officer
Mitzi Martinez-Montgomery................ 50 Vice President of Discovery and Preclinical Operations
Donna R. Rill............................ 50 Vice President of Operations
Sandy L. Livney.......................... 49 Vice President of Administration / Controller
Anthony N. Kamin......................... 44 Director
Paul M. Frison........................... 67 Director
Brian E. Rodriguez....................... 35 Director

Biographical information for the directors and executive officers of the
Company is set forth below:

David B. McWilliams was appointed President and Director in August 2004.
From December 2004 until August 2004, Mr. McWilliams was a private investor.
From June 2003 to December 2003, Mr. McWilliams served as President and CEO of
Bacterial Barcodes, Inc., a molecular diagnostics company. From May 2002 to June
2003, Mr. McWilliams served as CEO of Signase, Inc., a cancer therapy company.
Mr. McWilliams served as CEO of Encysive Pharmaceuticals Inc., a cardiovascular
therapeutics company from June 1992 to March 2002. Prior to June 1992, Mr.
McWilliams served as CEO of Zonagen Inc., a human reproductive products company.
Prior to that time, Mr. McWilliams was a senior executive with Abbott
Laboratories and a management consultant with McKinsey & Co. He currently serves
as a director of Novelos Therapeutics, Inc. and Fairway Medical Systems, Inc. He
also serves on the boards of the Texas Healthcare and Bioscience Institute and
the Houston Technology Center. He received an MBA in finance from the University
of Chicago, and a B.A. in chemistry, Phi Beta Kappa, from Washington and
Jefferson College.

Robert H. Gow was elected Chairman of the Board in June 2004. Since 1994,
Mr. Gow has been President of Yucatan Bamboo, Inc., a privately held company
that raises and produces bamboo products. From March 1992 to July 1994, Mr. Gow
served as President and Chief Executive Officer of SI Diamond Technology, Inc.,
a publicly held company engaged in the production of industrial coatings and
coating equipment. Between 1985 and March 1992, he devoted substantially all of
his time to the management of his personal investments. Prior to 1985, Mr. Gow
served at various times as the President of Enterprise Technologies, Inc., a
publicly held distributor of fuel oil, as a consultant to Norton Co., a publicly
held manufacturer of abrasives and diamond drilling bits; as Vice President of
Gulf Resources and Chemical Corp., a publicly held mining and chemical company;
as President of Stratford of Texas, Inc., a public agricultural conglomerate; as
President of Zapata Corp., a publicly held offshore drilling and maritime
support company; as President of Champlain-Zapata Plastic Machinery, Inc., a
subsidiary of Zapata that manufactured plastic molding equipment; and as
Supervisor of Industrial Engineering for Norton Co. Mr. Gow graduated from the
Yale School of Engineering in 1955.

Jim C. Williams, PhD, has served as the Company's Chief Operating Officer
since November 2004. Dr. Williams served as Vice President of Clinical and
Regulatory Affairs and as Chief Operating Officer for Opexa Pharmaceuticals,
Inc. from February 2004 to November 2004. From August 2003 to February 2004 he
was Senior Vice President, Regulatory Affairs and Operations for OSIRIS
Therapeutics, Inc., and from November 2002 to August 2003 Dr. Williams was Vice
President US Regulatory Affairs for Powderject Vaccines. From September 2001 to
November 2002 Dr. Williams served as Assistant Vice President, Worldwide
Regulatory Affairs for Wyeth BioPharma. Prior to this Dr. Williams served as
Executive Director Regulatory Affairs for Aventis Pasteur from November 1994 to
September 2001. Dr. Williams retired in 1994 as Captain from the U.S. Public
Health Service with over twenty years of service in applied research and
human-use product development which included assignments with the FDA, Center
for Biologics Evaluation and Research as a Director Scientist in the Division of
Vaccine and Related Product Applications; the US Army Medical Research Institute
of Infectious Diseases as Chief, Intracellular Pathogens branch and the National
Institutes of Health, National Institutes of Allergy and Infectious Diseases;
and at the U.S. Naval Medical Research Institute as a research microbiologist.

C. William Rouse has served as the Company's Chief Financial Officer since
May 2004. Prior to May 2004, Mr. Rouse was Managing Director of Rouse Associates
from April 1999 until May 2004. From January 1995 to April 1999 he was Chief
Marketing Officer for Futorian Inc. and from December 1990 to January 1995 he
was a Division General Manager for Masco Corporation. Prior to 1990 Mr. Rouse
was President of BEI, Inc. Mr. Rouse has led several startups and turnarounds
and founded several successful companies.

Mitzi Martinez-Montgomery, DVM, PhD, has served as the Company's Vice
President of Discovery and Preclinical Operations since November 2004. Dr.
Martinez-Montgomery is a veterinarian with over 17 years experience in lab
animal medicine and pre-clinical testing in small animals and primates and she
has a PhD in Immunology. From January 2002 to November 2004, she was the Vice
President of Development for Opexa Pharmaceuticals, Inc. where she implemented
the technology transfer of the manufacture of our autologous T cell therapy for
multiple sclerosis from the Baylor College of Medicine Department of Neurology
research laboratory to production for a clinical trial at Opexa Pharmaceuticals,
Inc. From 1997 to 2001 Dr. Martinez-Montgomery served as the Director of
Immunology and Pre-clinical Development for Zonagen, Inc., where she gained
extensive experience in the design and implementation of in vivo and in vitro
experiments to evaluate humoral and cell mediated immunity in humans and various
animal models and is a named inventor on a vaccine adjuvant patent. Dr.
Martinez-Montgomery also served as Study Director, attending veterinarian and
the manager of a full GLP toxicology lab while at Zonagen, where she was
responsible for experimental design and study protocol preparation, collection
of in-life data, clinical and anatomic pathology data, and pharmacokinetic
sampling conducted during dose range finding, acute, subacute, subchronic and
reproductive toxicity studies in mice, rats and rabbits.

Donna R. Rill has served as the Company's Vice President of Operations
since November 2004. Ms. Rill has nearly 30 years of extensive clinical and
research laboratory experience in cell and gene therapy research and clinical
application, immunological techniques and assessment, microbiology, diagnostic
virology, experimental design, and method development and implementation. She
has expertise in the areas of laboratory development and operations, FDA GMP and
regulatory compliance, quality control/assurance system development, and
clinical Standards of Practice. From April 2003 to November 2004 she was the
Director of Quality Systems and Process Development at Opexa Pharmaceuticals,
Inc. From November 1997 to April 2003 she was the Director of Translational
Research for the Center for Cell & Gene Therapy at Baylor College of Medicine.
She has worked to design, and qualify GMP Cell & Gene Therapy Laboratories, GMP
Vector Production facilities, and Translational Research Labs at St. Jude
Children(1)s Research Hospital, Texas Children(1)s Hospital, and Baylor College
of Medicine. Ms. Rill has held the positions of Laboratory Director of Cell and
Gene Therapy, Translational Research Center for Cell and Gene Therapy, Baylor
College of Medicine; Associate Scientist/Lab Manager of the Bone Marrow
Transplant Research Laboratory, and the GMP Cell & Gene Therapy Laboratories,
St. Jude Children(1)s Research Hospital; Clinical Infectious Disease Laboratory
Manager, Education Coordinator and Clinical Instructor, Department of Clinical
Laboratory, LeBonheur Children's Medical Center and University of Tennessee
Center for the Health Sciences.

Sandy L. Livney has served as the Company's Vice President of
Administration and Controller since November 2004. Ms. Livney has over 25 years
of experience working in private and public enterprises in various accounting
and marketing roles. She became certified as a Certified Public Accountant by
the State of Texas in 1981. Prior to November 2004, Ms. Livney worked for
Systems Management Solutions, Inc. as its Controller beginning in June 2003 and
served as Secretary, Treasurer and Chief Financial Officer until joining
PharmaFrontiers. From January 2001 until May 2003, Ms. Livney worked for
Petro-Valve, Inc., a privately owned enterprise, in a variety of capacities
including Vice President of Business Development, Interim Controller and
Personal Assistant to the owner. From January 1999 to 2001, Ms. Livney worked
for T. Warren Investments, Inc., a privately owned enterprise, in a variety of
functions including Controller, Business Manager and Personal Assistant to the
Owner.

Anthony N. Kamin has served as a Director of the Company since December,
2004. Since Mr. Kamin currently serves as President of two companies. Eastwood
Investment Management is a private equity multi-strategy and multi-asset class
manager. Interim Medical Management provides a range of management services
primarily in the biotechnology and medical device fields. From 1998 to 2003,
Kamin was a venture partner with Venture Strategy Partners. He is a co-founder
of Nobex Corporation (oral protein and peptide delivery) and Hi Fidelity
Entertainment. He is also currently Chairman of the Board of Advisors for
Devlab, a center for technology commercialization at Northwestern University. He
also serves on boards for Illinois Technology Enterprise Center (ITEC) in
Chicago, Real American Restaurants, B2P.com, and The Cove School for children
with learning disabilities. Kamin received a Masters Degree from Yale University
in International Relations with a concentration in International Law.

Paul M. Frison has served as a Director of the Company since November,
2004. Mr. Frison has been President and CEO of the Houston Technology Center
since January 1999. Before helping to found the Houston Technology Center in
1999, Frison spent 24 years as President and/or CEO building three public
companies, NYSE-listed LifeMark, NASDAQ-listed ComputerCraft, and LifeCell Corp.
(LIFC: NASDAQ-NM). Mr. Frison currently serves on the Board of Directors of the
Houston Technology Center, Micromed Technologies, Inc., The Institute of
Research and Rehabilitation, The Entrepreneurship Institute, The Houston
Entrepreneurs Foundation, Texas Council of AEA, Texchange, and the Advisory
Council of the University of Houston - College of Technology. He received his
B.A. from Occidental College in Los Angeles, California.

Brian E. Rodriguez has served as a Director and Chairman of the Audit
Committee since August, 2004. Mr. Rodriguez has served as an accounting and
finance consultant for Jefferson Wells International from October, 2004 to the
present. From March, 2002 to October, 2004, Mr. Rodriguez served as Controller
and then Director of Finance for JP Mobile Inc., a privately held wireless
software company based in Dallas. Mr. Rodriguez served as Controller for
ChipData Incorporated from March, 2001 to March, 2002. Prior to that Mr.
Rodriguez was a consultant with Parson Consulting from April, 1999 to March,
2001. Mr. Rodriguez has been a Certified Public Accountant in the State of Texas
since May, 1995. Mr. Rodriguez began his career in the Business Assurance
practice of Cooper & Lybrand in Dallas, Texas. Mr. Rodriguez holds a B.B.A. from
Texas A&M University.

Committees of the Board of Directors

We currently have an audit committee, a compensation committee, and a
nominating and corporate governance committee.

Audit Committee. The audit committee selects, on behalf of our board of
directors, an independent public accounting firm to be engaged to audit our
financial statements, discuss with the independent auditors their independence,
review and discuss the audited financial statements with the independent
auditors and management and recommend to our board of directors whether the
audited financials should be included in our Annual Reports to be filed with the
Securities and Exchange Commission. The Audit Committee operates pursuant to a
written charter, which was adopted February 3, 2005. The current members of the
audit committee are Messrs. Rodriguez, Kamin and Gow.

All of the current members of the Audit Committee are non-employee
directors who: (1) meet the criteria for independence set forth in Rule
10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); (2) have not participated in the preparation of our financial statements
or the financial statements of Opexa; and (3) are able to read and understand
fundamental financial statements, including a balance sheet, income statement
and cash flow statement. The board has determined that Mr. Rodriguez qualifies
as an "Audit Committee Financial Expert" as defined by item 401(e) of Regulation
S-B of the Exchange Act.

Compensation Committee. The compensation committee reviews and either
approves, on behalf of our board of directors, or recommends to the board of
directors for approval (1) the annual salaries and other compensation of our
executive officers and (2) individual stock and stock option grants. The
compensation committee also provides assistance and recommendations with respect
to our compensation policies and practices and assists with the administration
of our compensation plans. The members of our Compensation Committee are
independent directors as defined in the applicable rules and regulations
promulgated by the SEC, and are neither an officer nor employee of us or our
subsidiary. The Compensation Committee operates pursuant to a written charter,
which was adopted August 11, 2004. The current members of the compensation
committee are Messrs. Gow, Frisson and Kamin.

Nominating and Corporate Governance Committee. The nominating and corporate
governance committee assists our board of directors in fulfilling its
responsibilities by: identifying and approving individuals qualified to serve as
members of our board of directors, selecting director nominees for our annual
meetings of shareholders, evaluating the performance of our board of directors,
and developing and recommending to our board of directors corporate governance
guidelines and oversight with respect to corporate governance and ethical
conduct. Messrs. Gow and Frison are the current members of the Nominating and
Corporate Governance Committee, all of whom have been found by the Board of
Directors to be an "independent director" pursuant to the applicable rules and
regulations promulgated by the SEC. Mr. McWilliams is also a member of the
committee. This committee operates pursuant to a written charter adopted on
February 3, 2005.

Compensation Committee Interlocks And Insider Participation. During the
year ended December 31, 2003, we did not have a Compensation Committee because
Jason Otteson served as our sole officer and director. Following our acquisition
of PharmaFrontier Corp. in May 2004 and the appointment of our current Board of
Directors, our Board of Directors formed a Compensation Committee comprised of
Messrs. Rodriguez and Gow. Mr. Kamin joined the committee in 2005. None of the
committee members has ever been an employee of PharmaFrontiers Corp. None of our
executive officers serve as a member of the board of directors or compensation
committee of any entity that has any executive officer serving as a member of
our Board of Directors or Compensation Committee.

Compensation of Directors

Mr. Frison and Mr. Kamin receive $1,000 for each regular meeting attended
in person and $500 for each regular meeting attended by teleconference. Mr.
Rodriguez receives $1,250 per month and Mr. Gow receives $3,000 per month
irregardless of how many meetings are held and whether or not they attend the
meetings in person or by teleconference. Mr. McWilliams who is a director and an
officer does not receive any compensation for his services as a member of our
board of directors. We reimburse our directors for travel and lodging expenses
in connection with their attendance at board and committee meetings.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following tables set forth certain information regarding our CEO and
each of our most highly-compensated officers whose total annual salary and bonus
for the fiscal years ending December 31, 2004, 2003 and 2002 exceeded $100,000.

Long Term Compensation Awards
Annual Compensation Securities Underlying
------------------- ----------------------------- All Other
Name and Salary Bonus Options Compensation
Principal Position Year ($) ($) (#) ($)
------------------ ---- --- --- --- ---

David B. McWilliams (1) 2004 73,000 - 370,000 (2) -
2003 - - - -
2002 - - - -

Warren Lau (3) 2004 98,000 - - -
2003 - - - -
2002 - - - -

Jason Otteson (4) 2004 42,000 - - -
2003 102,000 - 24,000 -
2002 102,000 - - -

- -----------
(1) Served as chief executive officer since August 2004.
(2) See "Executive Employment Contracts" for a discussion of the option.
(3) Served as chief executive officer from June 2004 through August 2004.
(4) Served as chief executive officer until June 2004.

Option Grants in Last Fiscal Year

(Individual Grants)

Number of Securities % of Total Options Exercise/Base Price Expiration
Name Options Granted Granted to Fiscal Year ($/Share) Date

David B. McWilliams 370,000 32% 3.00 August 2009
Warren Lau - - - -
Jason Otteson - - - -

Options Exercises and Fiscal 2004 Year End Values

Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at December 31 2004 at December 31 2004 (1)
------------------- ------------------- ------------------- -------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ------------------- ------------------- ------------------- -------------------

David B. McWilliams 50,000 320,000 $ 170,000 $ 1,088,000
Warren Lau - - $ - $ -
Jason Otteson - - - -

(1) The value of "in-the-money" stock options represents the difference between
the $3.00 exercise price of such options and the fair market value of $6.40
per share of common stock as of December 31, 2004, the closing price of the
common stock reported on the OTC Bulletin Board.

No options were exercised during the fiscal year ended December 31, 2004.
No stock appreciation rights were outstanding at the end of the 2004 fiscal
year.

Executive Employment Contracts

Mr. David B. McWilliams has an existing employment agreement with us that
he entered into effective August 23, 2004. Mr. McWilliams' current agreement for
the position of chief executive officer is at an annual salary of $250,000 and
may be terminated by us or Mr. McWilliams at any time for any or no reason. Mr.
McWilliams has the right to purchase 370,000 shares of our common stock at a
price per share of $3.00, of which 10,000 shares vest on the 1st day of each
month of Mr. McWilliams' employment. In January 2005, Mr. McWilliams was granted
an option to purchase 50,000 shares of our common stock at a purchase price of
$3.00 per share.

C. William Rouse entered into an employment agreement, expiring April 2005,
providing for an annual salary of $180,000. Mr. Rouse has the right to purchase
100,000 shares of our common stock at a price per share of $3.00. This option
will vest in three parts: 33,333 on April 29, 2005, 33,333 on April 29, 2006 and
finally 33,334 on April 29, 2007. Any unexercised options will expire on April
29, 2009. In January 2005, Mr. Rouse was granted an option to purchase 50,000
shares of common stock at a purchase price of $3.00 per share.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of our common stock
beneficially owned as of July 15, 2005 by:

o those persons or groups known to beneficially own more than 5% of our
common stock;

o each of our executive officers and directors; and

o all of our directors and executive officers as a group.

For purposes of this table, beneficial ownership is determined in
accordance with Rule 13d-3 promulgated under the Securities Exchange Act of
1934. Except as indicated below, the security holders listed possess sole voting
and investment power with respect to the shares beneficially owned by that
person.

-------------------------------------
Number of Shares Percentage of
Name and Address of Beneficial Owner Owned Class(1)
-------------------------------------

George Jarkesy, Jr. (2) (3)................................... 2,109,580 10.25%
Top Tier Investments (4)...................................... 1,228,837 5.97%
Warren Lau (2)................................................ 1,098,748 5.34%
David B. McWilliams (5)....................................... 442,127 2.15%
Robert H. Gow (2)............................................. 342,500 1.66%
C. William Rouse (6).......................................... 254,801 1.24%
Jim C. Williams (7)........................................... 142,538 *
Anthony N. Kamin (8).......................................... 106,667 *
Brian E. Rodriguez (9)........................................ 53,333 *
Mitzi Martinez-Montgomery..................................... 24,114 *
Sandy Livney (10)............................................. 37,500 *
Paul M. Frison (11)........................................... 6,667 *
Donna R. Rill................................................. 3,617 *

All directors and executive officers as a group (9 persons
including the executive officers and directors listed above).. 1,413,864 6.87%
- -------

* Less than 1%.

(1) Ownership percentages are based on 20,579,545 shares of common stock issued
and outstanding as of July 15, 2005.

(2) Address: c/o PharmaFrontiers Corp., 2408 Timberloch, Suite B-7, The
Woodlands, Texas 77380.

(3) Includes 635,000 shares held by the Jarkesy Foundation, Inc. Mr. Jarkesy's
spouse holds voting and dispositive power with respect to these shares.

(4) Address: 50 California Street, Suite 3000, San Francisco, California 94111.

(5) Includes 146,667 shares of common stock that Mr. McWilliams may purchase
upon exercise of stock options that are currently vested or will become
vested within 60 days of July 15, 2005. Includes 143,703 shares of common
stock that Mr. McWilliams may purchase upon exercise of warrants that are
currently exercisable.

(6) Includes 66,667 shares of common stock that Mr. Rouse may purchase upon
exercise of stock options that are currently vested or will become vested
within 60 days of July 15, 2005. Includes 25,215 shares of common stock
that Mr. Rouse may purchase upon exercise of warrants that are currently
exercisable.

(7) Includes 56,818 shares of common stock that Dr. Williams may purchase upon
exercise of warrants that are currently exercisable.

(8) Includes 6,667 shares of common stock that Mr. Kamin may purchase upon
exercise of stock options that are currently vested or will become vested
within 60 days of July 15, 2005.

(9) Includes 26,667 shares of common stock that Mr. Rodriguez may purchase upon
exercise of stock options that are currently vested or will become vested
within 60 days of July 15, 2005.

(10) Includes 37,500 shares of common stock that Ms. Livney may purchase upon
exercise of warrants that are currently exercisable.

(11) Includes 6,667 shares of common stock that Mr. Frison may purchase upon
exercise of stock options that are currently vested or will become vested
within 60 days of July 15, 2005.

SELLING STOCKHOLDERS

No stockholder may offer or sell shares of our common stock under this
prospectus unless such stockholder has notified us of his or her intention to
sell shares of our common stock and this prospectus has been declared effective
by the SEC, and remains effective at the time such selling stockholder offers or
sells such shares. We are required to amend this prospectus to reflect material
developments in our business, financial position and results of operations. Each
time we file an amendment to this prospectus with the SEC, it must first be
declared effective prior to the offer or sale of shares of our common stock by
the selling stockholders.

The common stock covered by this prospectus is to be offered for the
account of the selling stockholders in the following table. The selling
stockholders may from time to time sell all, some or none of the shares of
common stock offered by this prospectus.

The following table, which we have prepared based on information provided
to us by the applicable selling stockholder, sets forth the name, the number of
shares of common stock beneficially owned by the selling stockholders intending
to sell our common stock and the number of shares of common stock to be offered.
Unless set forth below, none of the selling stockholders selling in connection
with the prospectus has held any position or office with, been employed by, or
otherwise has had a material relationship with us or any of our affiliates
during the three years prior to the date of the prospectus.

Number of
Shares of Number and % of
Number of Shares Common Outstanding Shares of
of Common Stock Stock Common Stock Owned
Beneficially Offered After Completion of
Name of Selling Stockholder Owned (1) Hereunder Offering
- ----------------------------------- --------------------- -------------- ------------------------
Number % (2)
----------- ----------

AFDSMSSAS, L.P. (3) 52,500 52,500 -0- *

Alkek & Williams Ventures (4) 512,501 512,501 -0- *

Alpine Atlantic Asset Management AG
(5) 1,240,295 1,240,295 -0- *

Andrew B. & Shanna Sue Linbeck (6) 127,500 127,500 -0- *

Anthony J. Spatacco, Jr. (7) 73,570 73,570 -0- *

Anthony M. Sensoli (8) 251,644 251,644 -0- *

Anthony M. Sensoli, IRA Charles
Schwab & Co., Inc. Custodian (9) 44,620 44,620 -0- *

Archie McK Malone (10) 136,760 136,760 -0- *

Arthur J. & Phyllis C. Goodwin 2001
Family Trust Dated 4-26-01 (11) 29,736 29,736 -0- *

Beverly E. Wrubel (12) 29,634 29,634 -0- *

Billie Willmon Jenkin (13) 60,356 60,356 -0- *

Bobby D. Perry (14) 125,003 125,003 -0- *

Bradley S. Stewart (15) 77,192 77,192 -0- *

Brewer & Pritchard, PC (16) 382,506 382,506 -0- *

Bruce C. Marek (17) 308,356 308,356 -0- *

Bruno Nordberg (18) 62,625 62,625 -0- *

Bruno or Joan A. Nordberg, JWROS (19) 74,007 74,007 -0- *

C. William Rouse (20) 234,583 38,134 196,450 *

Cameron Living Trust Ltd 8/31/95 (21) 29,603 29,603 -0- *

Capital Growth Resources (22) 55,235 55,235 -0- *

Centrum Bank AG (23) 295,000 295,000 -0- *

Charles L. Bradley (24) 125,003 125,003 -0- *

Cimarron Biomedical Equity Master
Fund, L.P. (25) 625,001 625,001 -0- *

Citigroup Global Markets Custodian
FBO Mary Ann Wesner, 2004 Roth IRA
(26) 13,257 13,257 -0- *

Citigroup Global Markets Custodian
FBO Mary Ann Wesner, 2005 Roth IRA
(27) 7,228 7,228 -0- *

Citigroup Global Markets Custodian
FBO Terry Wesner, 2004 Roth IRA
(28) 10,311 10,311 -0- *

Citigroup Global Markets Custodian
FBO Terry Wesner, 2005 Roth IRA (29) 13,257 13,257 -0- *

CKW LLC (30) 62,501 62,501 -0- *

Clariden Investments LTD (31) 154,178 154,178 -0- *

Crestview Capital Master, LLC (32) 1,875,000 1,875,000 -0- *

Crutchfield Family 1976 Trust (33) 147,603 147,603 -0- *

Dale W. Spradling (34) 438,253 308,253 130,000 *

Daniel L. Zimmerman (35) 74,135 74,135 -0- *

David B. McWilliams (36) 423,193 207,958 215,235 1.02

David Livney (37) 37,500 37,500 -0- *

David P. Haswell (38) 30,271 30,271 -0- *

Davis Investments V LP (39) 2,306,745 2,136,474 170,271 *

Delaware Charter Guaranty & Trust fbo
Andre Guay, IRA (40) 24,077 24,077 -0- *

Delaware Charter Guaranty & Trust fbo
Gisele Guay, IRA (41) 36,115 36,115 -0- *

Delaware Charter Guaranty & Trust fbo
Ronald Brangwyn, IRA (42) 30,384 30,384 -0- *

Dietrich & Rosemarie Riemer (43) 75,000 75,000 -0- *

DLD Family Investments, LLC (44) 500,003 500,003 -0- *

Donald G. Stewart (45) 340,430 291,919 48,511 *

Douglas Alan Jenkin (46) 118,575 118,575 -0- *

E. Elaine Schuster (47) 59,329 59,329 -0- *

E55 LP (48) 62,501 62,501 -0- *

Edward W. Gray and Sharon H. Gray (49) 29,541 29,541 -0- *

Elizabeth J. Hanson (50) 75,000 75,000 -0- *

Elizabeth J. Hanson, IRA (51) 29,675 29,675 -0- *

Enable Capital Management, LLC (52) 888,390 888,390 -0- *

Enable Growth Partners LP (53) 1,050,000 1,050,000 -0- *

Enable Opportunity Partners LP (54) 225,000 225,000 -0- *

Ervin Living Trust (55) 60,500 60,500 -0- *

Ervin Living Trust Dtd.7/6/95, Robert
D. Ervin & Rita Y. Ervin Co-TTEES
(56) 62,501 62,501 -0- *

First Trust Corporation TTEE FBO:
Lynn C. Kalcic (57) 14,227 14,227 -0- *

First Trust Corporation TTEE FBO:
Mary A. Kalcic (58) 39,109 39,109 -0- *

Frank M. Mandola (59) 123,342 123,342 -0- *

Fred S. Harper (60) 166,111 166,111 -0- *

Gary Hanson & Elizabeth Hanson (61) 29,603 29,603 -0- *

Gemini Master Fund, Ltd. (62) 296,541 296,541 -0- *

George E. Liberato (63) 61,671 61,671 -0- *

George Jarkesy, Jr. 1,474,500 1,474,500 -0- *

H. Michael Lambert (64) 349,658 304,658 45,000 *

Harold E. Tellefsen Trust (65) 86,203 86,203 -0- *

HRBFA Custo. Of the IRA FBO Mary Ann
Sharrow (66) 107,125 107,125 -0- *

HRBFA Custo. Of the IRA FBO Paul G.
Sharrow (67) 101,173 101,173 -0- *

I. Dwyane Davis (68) 121,481 121,481 -0- *

Insiders Trend Fund LP (69) 129,436 129,436 -0- *

Jack Dulworth (70) 125,003 125,003 -0- *

James E. Striedel (71) 153,202 153,202 -0- *

James G. Geistfeld Living Trust (72) 29,644 29,644 -0- *

Jarkesy Foundation, Inc. (73) 635,080 635,080 -0- *

Jerome T. Usalis (74) 1,138,080 908,079 230,001 1.09

Jessica Spradling (75) 375,000 375,000 -0- *

Jimmy C. Williams (76) 106,869 80,479 26,390 *

John H. Crutchfield (77) 295,308 295,308 -0- *

John T. Borgese (78) 145,579 145,579 -0- *

Joseph D. Mandola (79) 264,182 247,515 16,667 *

Joseph L. Draskovich (80) 30,250 30,250 -0- *

Joyce E. Burris (81) 30,332 30,332 -0- *

Kalcic Exemption Trust (82) 30,312 30,312 -0- *

Kirk Folkerts (83) 269,762 216,628 53,134 *

Lakeview Direct Investments, LP (84) 250,001 250,001 -0- *

Lawrence S. Yunker (85) 17,657 17,657 -0- *

LB (Swiss) Private Bank LTD (86) 77,063 77,063 -0- *

Linda M. Barone/Larry R. Zilli (87) 74,161 74,161 -0- *

Liparus, LLC (88) 29,613 29,613 -0- *

Lone Star No. 1, Ltd (89) 127,500 127,500 -0- *

Louis R. Reif (90) 98,251 75,651 22,600 *

Marcus F. Wray (91) 62,501 62,501 -0- *

Mark A. Stewart (92) 332,553 279,386 53,167 *

Mark S. Boland (93) 122,631 122,631 -0- *

Michael Hamblett (94) 147,603 147,603 -0- *

Michael K. Boudreaux (95) 29,592 29,592 -0- *

Michel C. Neumann (96) 29,962 29,962 -0- *

Nancy R. Greer Linn (97) 58,856 58,856 -0- *

NFS LLC/FMTC FBO Richard E Crawford
(98) 148,271 148,271 -0- *

Nick Lippuner & Marianne Lippuner (99) 92,926 92,926 -0- *

Norman R. Morris Living Trust (100) 62,501 62,501 -0- *

Pamela Dru Sutton (101) 73,955 73,955 -0- *

Panacea Fund, LLC (102) 626,250 626,250 -0- *

Pankaj A. Patel (103) 295,719 295,719 -0- *

Parsifal Investments, L.P. (104) 131,250 131,250 -0- *

Paul G. Sharrow (105) 29,644 29,644 -0- *

Paul Masters, IRA (106) 147,192 147,192 -0- *

Pershing LLC as Custodian FBO Kinnary
Patel Rollover IRA (107) 117,712 117,712 -0- *

Pershing LLC as Custodian FBO Kinnary
Patel Roth IRA (108) 117,712 117,712 -0- *

Pinnacle Trust Co., LTA (109) 625,001 625,001 -0- *

Provident Premier Master Fund, Ltd
(110) 591,438 591,438 -0- *

Renaissance Interests, L.P. (111) 262,500 262,500 -0- *

Richard N. Ernst (112) 296,541 296,541 -0- *

Richard T. Jeleniewski (113) 74,289 74,289 -0- *

Robert F. Donathan (114) 295,308 295,308 -0- *

Roland Hartman (115) 348,322 148,322 200,000 *

Ronald Brangwyn (116) 62,501 62,501 -0- *

Rudy Aguirre and Therese Mosqueda
Ponce (117) 30,384 30,384 -0- *

S. Edmund Resciniti (118) 125,003 125,003 -0- *

SAA Trust (119) 62,625 62,625 -0- *

SAA Trust, Paul & MaryAnn Mallis
TTEES (120) 44,420 44,420 -0- *

Sanders Morris Harris (121) 652,752 652,752 -0- *

Sandra L. Livney (122) 37,500 37,500 -0- *

Schroder & Co Bank AG (123) 524,031 524,031 -0- *

Scott B. Seiman (124) 150,000 150,000 -0- *

Shantilal C. Patidar (125) 183,666 138,666 45,000 *

SIBEX Capital Fund, Inc. (126) 750,000 750,000 -0- *

SMI Re Limited (127) 3,572,397 3,372,397 200,000 *

Snehal S Patel & Kinnary Patel, Jt.
Tenants in Common (128) 979,610 979,610 -0- *

Stahl Family Revocable Living Trust
dated 8-23-01 (129) 30,260 30,260 -0- *

Sterling Trust Co fbo Carol A. Wynn
(130) 58,856 58,856 -0- *

Sterling Trust Company, Custodian fbo
Harold E. Tellefsen (131) 54,931 54,931 -0- *

Stone & Sutton, P.A. P/S Trust Pam
Sutton, Trustee (132) 29,582 29,582 -0- *

T. William Merrill (133) 125,003 125,003 -0- *

TCMP3 Partners, L.P. (134) 296,438 296,438 -0- *

Terry H. Wesner (135) 364,540 308,048 56,492 *

Terry Wesner & MaryAnn Wesner (136) 152,329 152,329 -0- *

Timothy L. Brawner (137) 29,644 29,644 -0- *

Todd R. Allen (138) 92,269 92,269 -0- *

University of Chicago (139) 550,397 550,397 -0- *

vFinance Managed by Jonathan C. Rich
(140) 14,000 14,000 -0- *

Yellowstone Equity Partners, Ltd.
(141) 243,750 243,750 -0- *

Millard B. Ryland, IRA (142) 87,499 87,499 -0- *

Albert and Margaret Alkek Foundation
(143) 625,002 625,002 -0- *

Beverly B. Arnold (144) 250,002 250,002 -0- *

Walter W. Pollack, Jr. (145) 375,000 375,000 -0- *

Michale and Kristine Marrale (146) 75,000 75,000 -0- *

Sam Buck (147) 75,000 75,000 -0- *

Starboard Capital Markets (148) 1,000 1,000 -0- *

Monarch Capital Group, LLC (149) 850 850 -0- *

SW Bach (150) 11,900 11,900 -0- *

Harry Groszecki (151) 112,500 112,500 -0- *

Lippert Heilshorn & Associates Inc.
(152) 49,838 49,838 -0- *

James Boston (153) 27,503 27,503 -0- *

682501 Alberta Ltd. (154) 62,501 62,501 -0- *

Mitchell Sassower (155) 37,500 37,500 -0- *

D. Carl Lustig (156) 50,003 50,003 -0- *

Steven Sach (157) 75,000 75,000 -0- *

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
subject to options or warrants currently exercisable or exercisable within
60 days of July 15, 2005 are deemed outstanding for computing the
percentage of the person holding such option or warrant but are not deemed
outstanding for computing the percentage of any other person.

(2) Percentage is based on 21,153,746 shares of common stock outstanding.

(3) Includes 38,500 shares of common stock underlying warrants. Saleh M.
Shenaq exercises voting and dispositive power over all of the shares
beneficially owned by AFDSMSSAS.

(4) Includes 375,834 shares of common stock underlying warrants. Alkek &
Williams Ventures is a private investment fund. Scott Seaman exercises
voting and dispositive power over all of the shares beneficially owned by
Alkeck & Williams Ventures.

(5) Includes 817,149 shares of common stock underlying warrants. Alpine
Atlantic Asset Management AG is a private investment fund. Willy Betschart
exercises voting and dispositive power over all of the shares beneficially
owned Alpine, a Zurich based private investment fund.

(6) Includes 93,500 shares of common stock underlying warrants.

(7) Includes 48,451 shares of common stock underlying warrants.

(8) Includes 165,839 shares of common stock underlying warrants.

(9) Includes 29,421 shares of common stock underlying warrants. Anthony M.
Sensoli exercises voting and dispositive power over all of the shares
beneficially owned by Anthony M. Sensoli, IRA Charles Schwab & Co., Inc.
Custodian.

(10) Includes 94,791 shares of common stock underlying warrants.

(11) Includes 19,607 shares of common stock underlying warrants. Arthur J.
Goodwin exercises voting and dispositive power over all of the shares
beneficially owned by Arthur J. & Phyllis C. Goodwin 2001 Family Trust
Dated 4-26-01.

(12) Includes 19,531 shares of common stock underlying warrants.

(13) Includes 39,861 shares of common stock underlying warrants.

(14) Includes 91,669 shares of common stock underlying warrants.

(15) Includes 51,107 shares of common stock underlying warrants.

(16) Includes 36,669 shares of common stock underlying warrants. Brewer and
Pritchard, PC is a professional corporation. Thomas Pritchard exercises
voting and dispositive power over all of the shares beneficially owned by
Brewer and Pritchard PC.

(17) Includes 204,128 shares of common stock underlying warrants.

(18) Includes 45,925 shares of common stock underlying warrants.

(19) Includes 48,772 shares of common stock underlying warrants.

(20) Includes 25,215 shares of common stock underlying warrants and 66,667
options that are vested with an exercise price of $3.00.

(21) Includes 19,509 shares of common stock underlying warrants. Mr. George R.
Cameron exercises voting and dispositive power over all of the shares
beneficially owned by Cameron Living Trust.

(22) Includes 37,371 shares of common stock underlying warrants. Capital Growth
Resources is a Broker/Dealer that acquired these securities for
underwriting activities. Walt Miller has the power to vote and dispose of
these shares owned by Capital Growth Resources.

(23) Includes 194,333 shares of common stock underlying warrants. William
Pinamonti exercises voting and dispositive power over all of the shares
beneficially owned by Centrum Bank AG.

(24) Includes 91,669 shares of common stock underlying warrants.

(25) Includes 458,334 shares of common stock underlying warrants. Cimarron
Biomedical Equity Master Fund is an investment fund. J. H. Cullum Clark
has the power to vote and dispose of PharmaFrontiers Common Stock owned by
Cimarron Biomedical Equity Master Fund.

(26) Includes 8,731 shares of common stock underlying warrants. Mary Ann Wesner
exercises voting and dispositive power over all of the shares beneficially
owned by Mary Ann Wesner, 2004 Roth IRA.

(27) Includes 4,761 shares of common stock underlying warrants. Mary Ann Wesner
exercises voting and dispositive power over all of the shares beneficially
owned by Mary Ann Wesner, 2005 Roth IRA.

(28) Includes 6,791 shares of common stock underlying warrants. Terry Wesner
exercises voting and dispositive power over all of the shares beneficially
owned by Terry Wesner, 2004 Roth IRA.

(29) Includes 8,731 shares of common stock underlying warrants. Terry Wesner
exercises voting and dispositive power over all of the shares beneficially
owned by Terry Wesner, 2005 Roth IRA.

(30) Includes 45,834 shares of common stock underlying warrants. CKW LLC is a
private investment fund. David J Kowalick exercises voting and dispositive
power over all of the shares beneficially owned by CKW LLC.

(31) Includes 102,064 shares of common stock underlying warrants. Clariden
Investments LTD. Is a private investment fund. Ricc-Lee Ingram exercises
voting and dispositive power over all of the shares beneficially owned by
Clariden Investments LTD.

(32) Includes 1,375,000 shares of common stock underlying warrants. Crestview
Capital Master, LLC is a private investment fund. Daniel I. Warsh
exercises voting and dispositive power over all of the shares beneficially
owned by Crestview Capital Master, LLC.

(33) Includes 97,242 shares of common stock underlying warrants. John
Crutchfield exercises voting and dispositive power over all of the shares
beneficially owned by Crutchfield Family 1976 Trust

(34) Includes 204,053 shares of common stock underlying warrants.

(35) Includes 48,866 shares of common stock underlying warrants.

(36) Includes 143,703 shares of common stock underlying warrants and 146,667
options that are vested with an exercise price of $3.00.

(37) Includes 27,500 shares of common stock underlying warrants.

(38) Includes 19,998 shares of common stock underlying warrants.

(39) Includes 1,456,747 shares of common stock underlying warrants. Davis
Investments V, LP is a private investment fund. Christopher Davis
exercises voting and dispositive power over all of the shares beneficially
owned by Davis Investments V, LP.

(40) Includes 15,896 shares of common stock underlying warrants. Andre Guay
exercises voting and dispositive power over all of the shares beneficially
owned by Andre Guay, IRA.

(41) Includes 23,844 shares of common stock underlying warrants. Gisele Guay
exercises voting and dispositive power over all of the shares beneficially
owned by Gisele Guay, IRA.

(42) Includes 20,081 shares of common stock underlying warrants. Ronald
Brangwyn exercises voting and dispositive power over all of the shares
beneficially owned by Ronald Brangwyn, IRA.

(43) Includes 55,000 shares of common stock underlying warrants.

(44) Includes 366,669 shares of common stock underlying warrants. Laura Liang
exercises voting and dispositive power over all of the shares beneficially
owned by DLD Family Investments, LLC.

(45) Includes 197,574 shares of common stock underlying warrants.

(46) Includes 78,155 shares of common stock underlying warrants.

(47) Includes 39,108 shares of common stock underlying warrants.

(48) Includes 45,834 shares of common stock underlying warrants. Fanny Chan
exercises voting and dispositive power over all of the shares beneficially
owned by E55LP.

(49) Includes 19,463 shares of common stock underlying warrants.

(50) Includes 55,000 shares of common stock underlying warrants.

(51) Includes 19,561 shares of common stock underlying warrants. Elizabeth J.
Hanson exercises voting and dispositive power over all of the shares
beneficially owned by Elizabeth J. Hanson, IRA.

(52) Includes 585,486 shares of common stock underlying warrants. Enable
Capital Management, LLC is a private investment fund. Brendan O'Neil
exercises voting and dispositive power over all of the shares beneficially
owned by Enable Capital Management, LLC.

(53) Includes 770,000 shares of common stock underlying warrants. Enable Growth
Partners LP is a private investment fund. Brendan O'Neil exercises voting
and dispositive power over all of the shares beneficially owned by Enable
Growth Partners LP.

(54) Includes 165,000 shares of common stock underlying warrants. Enable
Opportunity Partners LP is a private investment fund. Brendan O'Neil
exercises voting and dispositive power over all of the shares beneficially
owned by Enable Opportunity Partners LP.

(55) Includes 39,967 shares of common stock underlying warrants. Robert D.
Ervin exercises voting and dispositive power over all of the shares
beneficially owned by Ervin Living Trust.

(56) Includes 45,834 shares of common stock underlying warrants. Robert D.
Ervin & Rita Y. Ervin Co-TTEES exercise voting and dispositive power over
all of the shares beneficially owned by Ervin Living Trust Dated 7/6/95.

(57) Includes 9,381 shares of common stock underlying warrants. Lynn C. Kalcic
exercises voting and dispositive power over all of the shares beneficially
owned by First Trust Corporation TTEE FBO: Lynn C. Kalcic.

(58) Includes 25,787 shares of common stock underlying warrants. Mary A. Kalcic
exercises voting and dispositive power over all of the shares beneficially
owned by First Trust Corporation TTEE FBO: Mary A. Kalcic.

(59) Includes 81,651 shares of common stock underlying warrants.

(60) Includes 114,115 shares of common stock underlying warrants.

(61) Includes 19,509 shares of common stock underlying warrants.

(62) Includes 195,463 shares of common stock underlying warrants. Gemini Master
Fund, Ltd. is a private investment fund. Steven Winters exercises voting
and dispositive power over all of the shares beneficially owned by Gemini
Master Fund, Ltd.

(63) Includes 40,826 shares of common stock underlying warrants.

(64) Includes 201,416 shares of common stock underlying warrants.

(65) Includes 61,455 shares of common stock underlying warrants. Harold E.
Tellefsen exercises voting and dispositive power over all of the shares
beneficially owned by Harold E. Tellefsen Trust.

(66) Includes 70,638 shares of common stock underlying warrants. Mary Ann
Sharrow exercises voting and dispositive power over all of the shares
beneficially owned by HRBFA Custodian of the IRA FBO Mary Ann Sharrow.

(67) Includes 66,714 shares of common stock underlying warrants. Paul G.
Sharrow exercises voting and dispositive power over all of the shares
beneficially owned by HRBFA Custodian of the IRA FBO Paul G. Sharrow.

(68) Includes 84,686 shares of common stock underlying warrants.

(69) Includes 85,870 shares of common stock underlying warrants. Insiders Trend
Fund LP is a private investment fund. Anthony Marchese exercises voting
and dispositive power over all of the shares beneficially owned by
Insiders Trend Fund LP.

(70) Includes 91,669 shares of common stock underlying warrants.

(71) Includes 101,348 shares of common stock underlying warrants.

(72) Includes 19,539 shares of common stock underlying warrants. James G.
Geistfield exercises voting and dispositive power over all of the shares
beneficially owned by James G. Geistfeld Living Trust.

(73) Includes 439,325 shares of common stock underlying warrants. George
Jarkesy Jr. exercises voting and dispositive power over all of the shares
beneficially owned by Jarkesy Foundation.

(74) Includes 662,625 shares of common stock underlying warrants.

(75) Includes 275,000 shares of common stock underlying warrants.

(76) Includes 56,818 shares of common stock underlying warrants.

(77) Includes 194,559 shares of common stock underlying warrants.

(78) Includes 102,358 shares of common stock underlying warrants.

(79) Includes 168,311 shares of common stock underlying warrants.

(80) Includes 19,983 shares of common stock underlying warrants.

(81) Includes 20,044 shares of common stock underlying warrants.

(82) Includes 20,029 shares of common stock underlying warrants. Paul A Kalcic
exercises voting and dispositive power over all of the shares beneficially
owned by Kalcic Exemption Trust.

(83) Includes 147,861 shares of common stock underlying warrants.

(84) Includes 183,334 shares of common stock underlying warrants. Thomas Elden
exercises voting and dispositive power over all of the shares beneficially
owned by Lakeview Direct Investments, LP.

(85) Includes 11,628 shares of common stock underlying warrants.

(86) Includes 51,013 shares of common stock underlying warrants. Olaf Herr
exercises voting and dispositive power over all of the shares beneficially
owned by LB (Swiss) Private Bank LTD.

(87) Includes 48,885 shares of common stock underlying warrants.

(88) Includes 19,516 shares of common stock underlying warrants. Gregory Mallis
exercises voting and dispositive power over all of the shares beneficially
owned by Liparus, LLC.

(89) Includes 93,500 shares of common stock underlying warrants. James H.
Glanville exercises voting and dispositive power over all of the shares
beneficially owned by Lone Star No. 1, Ltd

(90) Includes 49,977 shares of common stock underlying warrants.

(91) Includes 45,834 shares of common stock underlying warrants.

(92) Includes 193,883 shares of common stock underlying warrants.

(93) Includes 85,530 shares of common stock underlying warrants.

(94) Includes 97,242 shares of common stock underlying warrants.

(95) Includes 19,501 shares of common stock underlying warrants.

(96) Includes 19,772 shares of common stock underlying warrants.

(97) Includes 38,761 shares of common stock underlying warrants.

(98) Includes 97,732 shares of common stock underlying warrants. Richard E.
Crawford exercises voting and dispositive power over all of the shares
beneficially owned by NFS LLC/FMTC FBO Richard E. Crawford.

(99) Includes 65,946 shares of common stock underlying warrants.

(100) Includes 45,834 shares of common stock underlying warrants. Norman R.
Morris exercises voting and dispositive power over all of the shares
beneficially owned by Norman R. Morris Living Trust.

(101) Includes 48,734 shares of common stock underlying warrants.

(102) Includes 459,250 shares of common stock underlying warrants. Panacea Fund,
LLC is a private investment fund. Charles Polsky exercises voting and
dispositive power over all of the shares beneficially owned by Panacea
Fund, LLC.

(103) Includes 194,861 shares of common stock underlying warrants.

(104) Includes 96,250 shares of common stock underlying warrants. Parsifal
Investments, L.P. is a private investment fund. Alfred L. Deaton III
exercises voting and dispositive power over all of the shares beneficially
owned by Parsifal Investments, L.P.

(105) Includes 28,607 shares of common stock underlying warrants. Patrick
Linbeck is a financial consultant and acquired these securities for a
result of the Company's June/July 2005 funding.

(106) Includes 19,539 shares of common stock underlying warrants.

(107) Includes 96,941 shares of common stock underlying warrants. Paul Masters
exercises voting and dispositive power over all of the shares beneficially
owned by Paul Masters IRA.

(108) Includes 77,522 shares of common stock underlying warrants. Kinnary Patel
exercises voting and dispositive power over all of the shares beneficially
owned by Kinnary Patel Rollover IRA.

(109) Includes 77,522 shares of common stock underlying warrants. Kinnary Patel
exercises voting and dispositive power over all of the shares beneficially
owned by Kinnary Patel Roth IRA.

(110) Includes 458,334 shares of common stock underlying warrants. Pinnacle
Trust Co., LTA is a private investment fund that acquired these securities
for underwriting activities. Andrew Linbeck has the power to vote and
dispose of PharmaFrontiers Common Stock owned by Pinnacle Trust Co., LTA.

(111) Includes 389,721 shares of common stock underlying warrants. Provident
Premier Master Fund, Ltd. is a private investment fund. Steven Winters
exercises voting and dispositive power over all of the shares beneficially
owned by Provident Premier Master Fund, Ltd.

(112) Includes 192,500 shares of common stock underlying warrants. Renaissance
Interests, L.P. is a private investment fund. Bradley C. Karp exercises
voting and dispositive power over all of the shares beneficially owned by
Renaissance Interests, L.P.

(113) Includes 195,463 shares of common stock underlying warrants.

(114) Includes 48,979shares of common stock underlying warrants.

(115) Includes 194,559 shares of common stock underlying warrants.

(116) Includes 97,769 shares of common stock underlying warrants.

(117) Includes 45,834 shares of common stock underlying warrants.

(118) Includes 20,081 shares of common stock underlying warrants.

(119) Includes 91,669 shares of common stock underlying warrants.

(120) Includes 45,925 shares of common stock underlying warrants. Paul and Mary
Ann Mallis TTEES exercise voting and dispositive power over all of the
shares beneficially owned by SAA Trust.

(121) Includes 29,274 shares of common stock underlying warrants. Paul and Mary
Ann Mallis TTEES exercise voting and dispositive power over all of the
shares beneficially owned by SAA Trust Paul and Mary Ann Mallis TTEES.

(122) Includes 87,920 shares of common stock underlying warrants. Salient
Partners is an investment firm that acquired these securities for
underwriting activities. Andrew Linbeck has the power to vote and dispose
of PharmaFrontiers Common Stock owned by Salient Partners.

(123) Includes 304,968 shares of common stock underlying warrants. Sanders
Morris Harris is an investment firm that acquired these securities for
underwriting activities. Ben Morris has the power to vote and dispose of
PharmaFrontiers Common Stock owned by Sanders Morris Harris.

(124) Includes 37,500 shares of common stock underlying warrants.

(125) Includes 346,889 shares of common stock underlying warrants. Markus Keller
exercises voting and dispositive power over all of the shares beneficially
owned by Schroder & Co Bank AG

(126) Includes 110,000shares of common stock underlying warrants.

(127) Includes 96,188 shares of common stock underlying warrants.

(128) Includes 550,000 shares of common stock underlying warrants. SIBEX Capital
Fund, Inc. is a private investment fund. Oleg S. Krasnoshchek exercises
voting and dispositive power over all of the shares beneficially owned by
SIBEX Capital Fund, Inc.

(129) Includes 2,231,091 shares of common stock underlying warrants. SMI Re
Limited is a private investment fund. Dr. Reginal McDaniel exercises
voting and dispositive power over all of the shares beneficially owned by
SMI Re Limited.

(130) Includes 38,761 shares of common stock underlying warrants.

(131) Includes 609,219 shares of common stock underlying warrants. Frederick
Stahl Jr. exercises voting and dispositive power over all of the shares
beneficially owned by Stahl Family Revocable Living Trust Dated 8-23-01.

(132) Includes 38,761 shares of common stock underlying warrants. Carol A Wynn
exercises voting and dispositive power over all of the shares beneficially
owned by Sterling Trust Company FBO Carol A. Wynn.

(133) Includes 36,323shares of common stock underlying warrants. Harold E
Tellefsen exercises voting and dispositive power over all of the shares
beneficially owned by Sterling Trust Company Custodian FBO Harold E
Tellefsen.

(134) Includes 19,494 shares of common stock underlying warrants. Pam Sutton
exercises voting and dispositive power over all of the shares beneficially
owned by P.A. P/S Trust Pam Sutton Trustee.

(135) Includes 91,669 shares of common stock underlying warrants.

(136) Includes 195,388 shares of common stock underlying warrants. TCMP3
Partners, LP is a private investment fund. Steve Slawson exercises voting
and dispositive power over all of the shares beneficially owned by TCMP3
Partners, LP.

(137) Includes 203,902 shares of common stock underlying warrants.

(138) Includes 100,708 shares of common stock underlying warrants.

(139) The University of Chicago, an Illinois not-for-profit corporation, having
its principal office at 5555 S. Woodlawn Avenue, Chicago, IL 60637 USA.
Alan Thomas exercises voting and dispositive power over all of the shares
beneficially owned by the University of Chicago.

(140) Includes 19,539 shares of common stock underlying warrants.

(141) Includes 65,464 shares of common stock underlying warrants.

(142) Includes 14,000 shares of common stock underlying warrants. vFinance is an
investment firm that acquired these securities for underwriting
activities. Jonathon C. Rich has the power to vote and dispose of
PharmaFrontiers Common Stock owned by vFinance.

(143) Includes 178,750 shares of common stock underlying warrants. Yellowstone
Equity Partners, Ltd. is a private investment fund. Brenda Lee exercises
voting and dispositive power over all of the shares beneficially owned by
Yellowstone Equity Partners, Ltd.

(144) Includes 64,166 shares of common stock underlying warrants. Millard B.
Ryland exercises voting and dispositive power over all of the shares
beneficially owned by Millard B. Ryland IRA.

(145) Includes 458,335 shares of common stock underlying warrants. Albert &
Margaret Alkek Foundation is a private investment fund. Scott Seaman
exercises voting and dispositive power over all of the shares beneficially
owned by Albert & Margaret Alkek Foundation.

(146) Includes 183,335 shares of common stock underlying warrants.

(147) Includes 275,000 shares of common stock underlying warrants.

(148) Includes 55,000 shares of common stock underlying warrants.

(149) Includes 55,000 shares of common stock underlying warrants.

(150) Includes 1,000 shares of common stock underlying warrants. Starboard
Capital Markets is an investment firm that acquired these securities for
underwriting activities. Michael Hamblett has the power to vote and
dispose of PharmaFrontiers Common Stock owned by Starboard Capital
Markets.

(151) Includes 1,000 shares of common stock underlying warrants. Monarch Capital
Group, LLC is an investment firm that acquired these securities for
underwriting activities. Anthony Marchese has the power to vote and
dispose of PharmaFrontiers Common Stock owned by Monarch Capital Group,
LLC.

(152) Includes 11,900 shares of common stock underlying warrants. SW Bach is an
investment firm that acquired these securities for underwriting
activities. Guy Clemente has the power to vote and dispose of
PharmaFrontiers Common Stock owned by SW Bach.

(153) Includes 82,500 shares of common stock underlying warrants.

(154) Keith L. Lippert has the power to vote and dispose of the shares owned by
Lippert Heilshorn & Associates, Inc.

(155) Includes 20,169 shares of common stock underlying warrants.

(156) Includes 45,834 shares of common stock underlying warrants. 682501 Alberta
Ltd. is a private investment fund. Jeff Green exercises voting and
dispositive power over all of the shares beneficially owned by Albert &
Margaret Alkek Foundation.

(157) Includes 27,500 shares of common stock underlying warrants.

(158) Includes 36,669 shares of common stock underlying warrants.

(159) Includes 55,000 shares of common stock underlying warrants.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

There are no related party transactions.

DESCRIPTION OF SECURITIES

Capitalization of the Company

Common Stock

We are authorized to issue 50,000,000 shares of common stock, par value
$0.05 per share. As of July 15, 2005, there are 20,579,545 shares of common
stock issued and outstanding. Each share of common stock is entitled to one vote
per share for the election of directors and on all other matters submitted to a
vote of stockholders. There are no cumulative voting rights. Common stockholders
do not have preemptive rights or other rights to subscribe for additional
shares, and the common stock is not subject to conversion or redemption. In the
event of liquidation, the holders of common stock will share equally in any
balance of corporate assets available for distribution to them. Subject to the
rights of holders of the any other securities subsequently issued, holders of
the common stock are entitled to receive dividends when and as declared by our
Board of Directors out of funds legally available. We have not paid any
dividends since its inception and has no intention to pay any dividends in the
foreseeable future. Any future dividends would be subject to the discretion of
the Board of Directors and would depend on, among other things, our future
earnings, the operating and financial condition, our capital requirements, and
general business conditions.

Preferred Stock

We are authorized to issue 10,000,000 shares of preferred stock, no par
value per share. As of July 15, 2005, no shares of preferred stock are issued
and outstanding. Our Board of Directors can, without approval of our
stockholders, issue one or more series of preferred stock. If we offer preferred
stock, our Board of Directors will determine the number of shares and the
rights, preferences and limitations of each series. These rights, preferences
and limitations may include specific designations, number of shares, liquidation
value, dividend rights, liquidation and redemption rights, voting rights, other
rights, including conversion or exchange rights, if any, and any other specific
terms.

Promissory Notes

During the six months ended February 14, 2005, we issued 15% Convertible
Exchangeable Notes with an aggregate principal amount of $6.1 million. On June
30, 2005, all of the 15% Convertible Exchangeable Notes and associated rights to
warrants were exchanged for common stock and Series A Warrants, Series B
Warrants and Series C Warrants. None of the notes or rights to warrants remain
outstanding.

Warrants and Options

2004 Stock Incentive Plan. Pursuant to our 2004 Stock Incentive Plan we may
issue to our officers, directors, employees and consultants incentive stock
options, non-qualified stock options and shares of restricted stock. The plan
provides for us to issue up to 2,000,000 shares of its common stock pursuant to
awards under the plan. The maximum number of shares in the Plan was increased to
3,000,000 by shareholder vote at our annual meeting in June 2005. As of July 15,
2005, we had outstanding options, granted pursuant to the plan, to purchase
1,424,500 shares of common stock at an exercise price of $3.00 per share. All of
our outstanding options expire five years after the date of grant. The plan is
designed to qualify under the Internal Revenue Code as an incentive stock option
plan.

Series A Warrants, Series B Warrants and Series C Warrants. As of July 15,
2005 we have issued and outstanding (i) Series A Warrants to purchase an
aggregate of 10,410,134 of our common shares, (ii) Series B Warrants to purchase
an aggregate of 4,164,054 of our common shares, and (iii) Series C Warrants to
purchase an aggregate of 8,328,107 of our common shares.

The Series A Warrant is exercisable at any time and has an exercise
price of $2.00 per share and expires on the later of (i) February 17, 2006
or (ii) five months after the registration statement for the re-sale of the
warrant shares becomes effective; if we issue common stock or common stock
equivalents for a price less than $1.50, the exercise price will be revised
to equal such lower price and the number of shares subject to the warrant
shall increase proportionately; provided, however, the exercise price will
not be reduced below $1.00 and any increase in the number of shares shall
be proportionately limited.

The Series B Warrant is exercisable at any time and has an exercise
price of $2.90 per share and expires on the later of (i) October 17, 2006
or (ii) 12 months after the registration statement for the re-sale of the
warrant shares becomes effective; if we issue common stock or common stock
equivalents for a price less than $1.50, the exercise price will be revised
to $2.00 and the number of shares subject to the warrant shall increase
proportionately.

The Series C Warrant is exercisable at any time and has an exercise
price of $4.00 per share and expires June 17, 2010; if prior to the third
anniversary of the closing of the offering we issue common stock or common
stock equivalents for a price less than $1.50, the exercise price will be
revised to $3.00 and the number of shares subject to the warrant shall
increase proportionately; if prior to the third anniversary of the closing
of the offering we issue common stock or common stock equivalents for a
price less than the then current exercise price but more than $1.50, the
exercise price will be revised to equal the weighted average price of the
outstanding shares and the newly issued shares; if after the third
anniversary of the closing of the offering we issue common stock or common
stock equivalents for a price less than the then current exercise price,
the exercise price will be revised to equal the weighted average price of
the outstanding shares and the newly issued shares; whenever any such
adjustments are made to the exercise price, the number of shares subject to
the Series C Warrant shall increase proportionately; provided, the exercise
price will not be reduced below $3.00 and any increase in the number of
shares shall be proportionately limited.

All of the warrants are exercisable immediately. Each of the Series A
warrants, Series B warrants and Series C warrants are only exercisable by
"accredited investors" as defined in Regulation D under the Securities Act
of 1933.

Placement Agent Warrants. In connection with the 15% Convertible
Exchangeable Note offering and the common stock offering closed June 17, 2005 we
have issued to the placement agent and other brokerage firms in those offerings
warrants to purchase an aggregate of 145,827 shares of common stock at an
exercise price of $1.50. These warrants are exercisable immediately and will
expire June 17, 2010.

Other Obligations To Issue Shares. We have entered into an agreement for
services which obligates us to issue shares of common stock with a value of
$85,000 to BlausenLisi LP. In addition, our license agreement with the
University of Chicago obligates us, subsequent to the later of November 30, 2005
or a financing, raising $10 million or more, to issue sufficient additional
shares to the University of Chicago so that it holds 2.6% of our common stock.

Restrictions on Sales By Certain Existing Shareholders

A total of 3,941,248 shares of our common stock held by Warren C. Lau,
George Jarkesy, Jr., R. Wayne Fritzsche, Robert H. Gow, David M. Klausmeyer,
Bruce Mackler and David R. Strawn are subject to a lock-up agreement that
precluded any sales prior to June 4, 2005 and, thereafter, limits sales of up to
an aggregate of 492,656 shares of our common stock per 90-day period. This
lock-up will terminate if the last sales price of our common stock is at or
above $10.00 per share for 10 out of 20 consecutive days, or upon a "change of
control" transaction.

A total of 891,820 shares of our common stock held by George Jarkesy, Jr.
and Brewer & Prichard, P.C. are subject to another lock-up agreement effective
May 2004 that limits sales of up to an aggregate of 74,319 shares of our common
stock per 90-day period. This lock-up agreement restriction will terminate if
the last sales price of our common stock is at or above $10.00 per share for 10
out of 20 consecutive days, or upon a "change of control" transaction.

A total of 2,500,000 shares held by Top Tier Investment, LLC and various
other shareholders are subject to another lock-up agreement effective November
5, 2004 that precludes any sales prior to November 5, 2005 and, thereafter,
limits sales of up to an aggregate of 312,500 shares of our common stock per
90-day period. There is no termination provision in this lock-up agreement.

PLAN OF DISTRIBUTION

We are registering shares of our common stock on behalf of the selling
stockholders. As used in this prospectus, "selling stockholders" includes
donees, transferees, pledgees and other successors in interest (other than
purchasers pursuant to this prospectus) selling shares received from a named
selling stockholder after the date of this prospectus. We will pay for all
costs, expenses and fees in connection with the registration of the shares. The
selling stockholders will pay for all selling discounts and commissions, if any.
The selling stockholders may offer and sell their shares from time to time in
one or more of the following types of transactions (including block
transactions):

o on any national exchange on which the shares are listed or any
automatic quotation system through which the shares are quoted,

o in the over-the-counter market,

o in privately negotiated transactions,

o through put and call transactions,

o through short sales, and

o a combination of such methods of sale.

The selling stockholders may sell their shares at prevailing market prices
or at privately negotiated prices. The selling stockholders may use brokers,
dealers or agents to sell their shares. The persons acting as agents may receive
compensation in the form of commissions, discounts or concessions. This
compensation may be paid by the selling stockholders or the purchasers of the
shares for whom such persons may act as agent, or to whom they may sell as a
principal, or both.

The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with these
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares in the course of hedging positions they assume with selling
stockholders. The selling stockholders may also enter into options or other
transactions with broker-dealers or other financial institutions which require
the delivery to these broker-dealers or other financial institutions of shares,
which such broker-dealer or other financial institution may resell pursuant to
this prospectus (as amended or supplemented to reflect such transaction). The
selling stockholders may also engage in short sales of shares and, in those
instances, this prospectus may be delivered in connection with the short sales
and the shares offered under this prospectus may be used to cover the short
sales.

The selling stockholders and any agents or broker-dealers that participate
with the selling stockholders in the offer and sale of the shares may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act
of 1933. Any commissions they receive and any profit they realize on the resale
of the shares by them may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933. Neither we nor any selling stockholder can
presently estimate the amount of such compensation. Because a selling
stockholder may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act of 1933, which may
include delivery through the facilities of the applicable exchange or automated
quotation system pursuant to Rule 153 under the Securities Act of 1933. The
selling stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving shares against certain liabilities,
including liabilities arising under the Securities Act of 1933.

The selling stockholders and any other person participating in a
distribution of the securities covered by this prospectus will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the rules and
regulations under the Securities Exchange Act of 1934, including Regulation M,
which may limit the timing of purchases and sales of any of the securities by
the selling stockholders and any other such person. Furthermore, under
Regulation M, any person engaged in the distribution of the securities may not
simultaneously engage in market-making activities with respect to the particular
securities being distributed for certain periods prior to the commencement of or
during such distribution. Regulation M's prohibition on purchases may include
purchases to cover short positions by the selling stockholders, and a selling
stockholder's failure to cover a short position at a lender's request and
subsequent purchases by the lender in the open market of shares to cover such
short positions, may be deemed to constitute an inducement to buy shares, which
is prohibited by Regulation M. All of the above may effect the marketability of
the securities and the ability of any person or entity to engage in
market-making activities with respect to the securities.

We are not aware of whether the selling stockholders have entered into any
agreements, understanding or arrangements with any broker-dealers regarding the
sale of their shares, nor as we aware that there is an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling stockholders.

Selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided they meet the criteria and conform to the requirements of that rule.

Following notification by a selling stockholder that it has entered into
any material arrangement with a broker-dealer for the sale of shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act,
disclosing:

o the name of each such selling stockholder and of the participating
broker-dealer(s);

o the number of shares involved;

o the initial price at which these shares were sold;

o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;

o that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and

o any other facts material to the transactions.

In addition, following notification by a selling stockholder that a donee,
pledgee, transferee or other successor-in-interest of such selling stockholder
intends to sell more than 500 shares, we will file a supplement to this
prospectus.

LEGAL MATTERS

The validity of the common stock offered by this prospectus was passed upon
for us by Vinson & Elkins L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements for the year ended December 31, 2004
and for the period from January 22, 2003 (date of inception) to December 31,
2003 included in this prospectus have been audited by Malone & Bailey PC,
independent registered public accounting firm, as stated in their report
appearing herein.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement we file with the
Securities and Exchange Commission. This prospectus does not contain all of the
information contained in the registration statement and all of the exhibits and
schedules thereto. For further information about PharmaFrontiers Corp., please
see the complete registration statement. Summaries of agreements or other
documents in this prospectus are not necessarily complete. Please refer to the
exhibits to the registration statement for complete copies of such documents.

We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. You may read and copy the registration statement,
including exhibits and schedules filed with it, at the SEC's public reference
facilities in Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain information on the operation of the public reference
room in Washington, D.C. by calling the Securities and Exchange Commission at
1-800-SEC-0330.

We file information electronically with the Securities and Exchange
Commission. Our Securities and Exchange Commission filings also are available
from the Securities and Exchange Commission's Internet site at
http://www.sec.gov, which contains reports, proxy and information statements and
other information regarding issuers that file electronically.

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheet as of March 31, 2005........................... F-2
Consolidated Statements of Expenses for the three months ended
March 31, 2005 and 2004.................................................. F-3
Consolidated Statements of Cash Flow for the three months ended
March 31, 2005 and 2004 and the period from January 22, 2003
(Inception) to March 31, 2005............................................ F-4
Report of Independent Registered Public Accounting Firm................... F-9
Consolidated Balance Sheet as of December 31, 2004........................ F-10
Consolidated Statements of Expenses for the year ended December 31,
2004 and the period from January 22, 2003 (Inception) through
December 31, 2003 and 2004............................................... F-11
Consolidated Statement of Changes in Stockholders Equity from
January 22, 2003 (Inception) through December 31, 2004................... F-12
Consolidated Statements of Cash Flows for the year ended December
31, 2004 and the period from January 22, 2003 (Inception) through
December 31, 2003 and 2004............................................... F-13

F-1

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
March 31, 2005
(unaudited)

Current Assets

Cash............................................................................... $ 1,711,098
Prepaid expenses................................................................... 129,310
-------------------
Current assets..................................................................... 1,840,408

Intangible assets, net of accumulated amortization of $648,630.......................... $ 26,394,204
Property & equipment, net of accumulated depreciation of $205,762....................... 348,892
-------------------
Total Assets....................................................................... $ 28,583,504
===================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable................................................................... $ 633,820
Accrued expenses................................................................... 466,230
Convertible notes, net of unamortized discount of $4,222,514....................... 1,902,345
Notes payable...................................................................... 2,391,889
-------------------
Total Current Liabilities..................................................... 5,394,284
-------------------

Commitments and Contingencies........................................................... --
Stockholders' Equity
Convertible preferred stock, no par value,
10,000,000 shares authorized, none issued and outstanding.......................... --
Common stock, $.05 par value, 50,000,000 shares
authorized, 10,534,526 shares issued and outstanding............................... 526,727
Additional paid in capital......................................................... 31,156,464
Deficit accumulated during the development stage................................... (8,493,971)
-------------------
Total Stockholders' Equity.................................................... 23,189,220
-------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................... $ 28,583,504
===================

F-2

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
Three Months Ended March 31, 2005 and 2004 and the
Period from January 22, 2003 (Inception) to March 31, 2005
(unaudited)

Inception through
Three Months Ended March 31, March 31,
--------------------------------------------- ---------------------
2005 2004 2005
-------------------- -------------------- ---------------------

General and administrative ............. $ 1,625,030 $ 512,411 $ 4,833,319
Research and development................ 644,264 -- 1,276,885
-------------------- -------------------- ---------------------
Net operating loss................. (2,269,294) (512,411) (6,110,204)
Interest income......................... 6,930 -- 12,922
Other income............................ 2,444 -- 4,823
Interest expense........................ (1,487,384) (30,616) (2,401,512)
-------------------- -------------------- ---------------------

Net Loss................................ $ (3,747,304) $ (543,027) $ (8,493,971)
==================== ==================== =====================

Basic and diluted loss per share........ $ (0.37) $ (0.12)

Weighted average shares Outstanding..... 10,224,456 4,376,771

F-3

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOW
Three Months Ended March 31, 2005 and 2004 and the
Period from January 22, 2003 (Inception) to March 31, 2005
(unaudited)

Inception through
Three Months Ended Three Months Ended March 31,
March 31, 2005 March 31, 2004 2005
-------------------- -------------------- ---------------------

Cash flows from operating activities $ (3,747,304) $ (543,028) $ (8,493,971)
Net loss...........................
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock issued for services........ -- 492,500 849,000
Stock issued for debt............ 109,073 -- 109,073
Amortization of discount on notes
payable due to warrants and beneficial
conversion feature................. 1,294,100 28,604 2,090,667
Amortization of intangible
assets........................... 396,869 -- 648,630
Depreciation..................... 21,444 37 34,502
Option expense................... 355,400 -- 478,733
Loss on disposition of fixed
assets........................... -- -- 457,122
Debt forgiveness
Changes in:
Accounts payable................. (554,772) (137) (495,965)
Prepaid expenses................. (34,973) -- (73,923)
Accrued expenses................. 249,575 4,583 280,901
-------------------- -------------------- ---------------------
Net cash used in operating (1,910,588) (17,441) (4,115,231)
activities -------------------- -------------------- ---------------------

Cash flows from investing activities
Purchase of licenses............... -- (25,000) (232,742)
Purchase of property & equipment (28,352) (3,611) (201,356)
-------------------- -------------------- ---------------------
Net cash used in (28,352) (28,611) (434,098)
investing activities............. -------------------- -------------------- ---------------------

Cash flows from financing activities
Common stock sold for cash......... -- 7,500 10,000
Common stock repurchased and
canceled......................... -- -- (325)
Repayment on notes payable......... (58,614) -- (63,614)
Proceeds from debt................. 2,856,660 100,000 6,314,366
-------------------- -------------------- ---------------------
Net cash provided by 2,798,046 107,500 6,260,427
financing activities............. -------------------- -------------------- ---------------------

Net change in cash...................... 859,106 61,448 1,711,098
Cash at beginning of year............... 851,992 68 --
-------------------- -------------------- ---------------------
Cash at end of period................... $ 1,711,098 $ 61,516 $ 1,711,098
==================== ==================== =====================

F-4

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Three Months Ended March 31, 2005 and 2004 and the
Period from January 22, 2003 (Inception) to March 31, 2005
(unaudited)

Three Months Ended Three Months Ended Inception through
March 31,
March 31, 2005 March 31, 2004 2005
----------------------- -------------------- --------------------

NON-CASH TRANSACTIONS
Issuance of common stock for purchase of
Opexa............................... $ -- $ -- $ 23,750,000
Issuance of common stock to Sportan
shareholders........................ -- -- 147,733
Issuance of common stock for University
of Chicago license.................. -- -- 427,075
Conversion of notes payable to common
stock............................... 34,751 -- 283,121
Conversion of accrued liabilities to
Common Stock........................ 17,176 -- 17,176
Conversion of accounts payable to note
payable............................. -- -- 93,364
Discount on convertible notes relating
to:
- warrants.......................... 1,433,108 -- 3,309,790
- beneficial conversion feature..... 831,945 -- 1,715,974
- stock attached to notes........... 999,074 -- 1,287,440

F-5

PHARMAFRONTIERS CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of
PharmaFrontiers Corp., ("Pharma"), (a development stage company), have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange Commission
("SEC"), and should be read in conjunction with the audited financial statements
and notes thereto contained in the Pharma's latest Annual Report filed with the
SEC on Form 10-K. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year. Notes to
the financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for the most recent fiscal year,
2004, as reported in Form 10-K, have been omitted.

NOTE 2 - STOCK BASED COMPENSATION

Pharma accounts for stock-based compensation under the intrinsic value
method. Under this method, Pharma recognizes no compensation expense for stock
options granted when the number of underlying shares is known and exercise price
of the option is greater than or equal to the fair market value of the stock on
the date of grant. The following table illustrates the effect on net loss and
net loss per share if Pharma had applied the fair value provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation, to stock-based
employee compensation for the three ended March 31, 2005 and 2004:

Three Months
ended March 31,
2005 2004
---------------- ----------------

Net loss as reported.......................................... $ (3,747,304) $ (543,027)
Add: stock based compensation determined under intrinsic
value-based method................................... 355,400 --
Less: stock based compensation determined under fair value based
method............................................... (453,024) --
---------------- ----------------
Pro forma net loss............................................ $ (3,844,928) (543,027)
================ ================
Basic and diluted net loss per common share:
As reported................................................. $ (0.37) $ (0.12)
Pro forma................................................... (0.38) (0.12)

The weighted average fair value of the stock options granted during
2005 was $6.46. Variables used in the Black-Scholes option-pricing model include
(1) 2% risk-free interest rate, (2) expected option life is the actual remaining
life of the options as of each year end, (3) expected volatility is 110% and (4)
zero expected dividends.

F-6

NOTE 3 - THIRD PARTY CONVERTIBLE NOTES & STOCK PAYABLE TO NOTE HOLDERS

During the first quarter of 2005, Pharma issued convertible notes to
investors totaling $2,896,884. A description of the notes is as follows:

o Maturity: The notes mature on November 30, 2005, at which time the
principal amount of the notes will be mandatorily convertible into
shares of common stock at the conversion price (as described below).

o Interest: Interest will accrue at a rate of 15% per annum. If Pharma
completes an Equity Financing prior to November 30, 2005, interest
will be converted to common stock using a conversion price of the
weighted average gross offering price of Pharma's common stock or
common stock equivalents issued in the Equity Financing. If no such
Equity Financing occurs, the accrued interest is convertible at $3.00
per share.

o Mandatory Exchange: In the event Pharma raises $10,000,000 in one or a
series of transactions by selling common stock or common stock
equivalents prior to the maturity of the notes ("Equity Financing"),
the principal amount of the notes will by automatically exchanged for
the same type of securities issued in the Equity Financing. The
exchange will occur upon the closing of the Equity Financing. The
conversion price used for the mandatory exchange will be equal to the
weighted average gross offering price of the common stock or common
stock equivalents sold in the Equity Financing. Pharma will pay
accrued interest on the closing date in cash or shares of common stock
valued at the common stock offering price of the Equity Financing.

o Conversion and conversion price: In the event that there is no Equity
Financing, the principal amount of the notes will automatically
convert into common stock and Pharma will have the right to pay the
accrued interest on notes in cash or with shares of common stock. The
number of shares of common stock shall be determined by dividing the
amount owed by $3.00. The conversion price may be adjusted from time
to time upon the occurrence of certain specified events.

o Additional shares: For each $100,000 loaned to Pharma, 10,000 shares
of common stock will be issued.

o Warrants: If the notes are mandatorily exchanged for Pharma
securities, Pharma will issue investors one-year warrants. The number
of warrants issued will be determined by dividing the aggregate
principal amount of the notes by the exercise price. The exercise
price of the warrants will be equal to 50% of the weighted average
gross offering price of the common stock or common stock equivalents
issued in the Equity Financing. If there is no Equity Financing prior
to the maturity of the notes, Pharma will issue note holders warrants
identical to those issued upon a mandatory exchange, except that the
exercise price shall equal the conversion price.

F-7

The proceeds from the notes have been discounted for the relative fair
value of the warrants, the stock, and beneficial conversion feature. All
discounts will be amortized over the life of the notes. 451,688 shares of stock
from proceeds raised in the latter part of 2004 and in 2005 was issued to
shareholders in March 2005. A summary of the notes is as follows:

Notes
Payable
-----------------
Gross proceeds from notes............................ $ 6,124,859
Less: Relative fair value of stock payable to note
holders...................................... (1,287,440)
Less: Relative value of warrants..................... (3,215,618)
Less: Beneficial conversion feature.................. (1,621,801)
Add: Amortization of discounts............... 1,902,345
-----------------
Value of note on March 31, 2005...................... $ 1,902,345
=================

NOTE 4 - NOTES PAYABLE

Notes payable to third parties consists of the following:

Note payable to the University of Chicago; no interest; due earlier of Pharma raising $ 1,500,000
$10,000,000 in an Equity Financing or October 30, 2005; secured by license...
Stock payable to the University of Chicago equal to 2.6% of outstanding
shares; no interest; due later of Pharma raising $10,000,000 in an
Equity Financing or
November 30, 2005; secured by license........................................ 891,889
----------------------------
Total........................................................................ $ 2,391,889
============================

NOTE 5 - COMMITMENT AND CONTINGENCIES

After purchasing Opexa, Pharma assumed an eighteen-month operating
lease from Opexa for a research facility. The lease commenced in June 2003 and
was due to expire in November 2004. Pharma extended the lease until March 31,
2005 and is continuing to operate under the terms of said lease until a final
lease agreement is negotiated with the landlord. Negotiations for expanded lease
space and a manufacturing facility build out are underway; monthly lease payment
is yet to be determined. Pharma has the option to exercise two 5 year renewals
extending the lease to March 31, 2010 and if the second option is exercised,
extending the lease to March 31, 2015.

NOTE 6 - EQUITY

In March 2005, 451,688 shares of common stock with a relative fair
value of $999,074 were issued to note holders as their additional shares for
their subscription investment in Pharma. See note 4 for details.

During February 2005, 23,000 shares of common stock were issued to note
holders for the conversion of $51,927 of principal and interest from the notes.

F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
PharmaFrontiers Corp.
(a development stage company)
The Woodlands, Texas

We have audited the accompanying consolidated balance sheet of PharmaFrontiers
Corp., ("Pharma")(a development stage company), as of December 31, 2004 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the year then ended and the period from January 22, 2003
(Inception) through December 31, 2003 and 2004. These consolidated financial
statements are the responsibility of Pharma's management. Our responsibility is
to express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Pharma
as of December 31, 2004 and the consolidated results of its operations and its
cash flows for the periods described in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that Pharma will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, Pharma has suffered recurring losses from
operations and has a negative working capital, which raises substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters are described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

MALONE & BAILEY, PC
www.malone-bailey.com
Houston, Texas

February 23, 2005

F-9

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
December 31, 2004

Current Assets
Cash $ 851,992
Prepaid expenses.......................................................... 94,337
---------------

Current assets............................................................ 946,329

Intangible assets, net of $251,761 of
accumulated amortization.................................................. 26,791,073
Property & equipment, net of $184,318
of accumulated depreciation............................................... 341,984
---------------

Total Assets.......................................................... $ 28,079,386
===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable.......................................................... $1,188,617
Accrued expenses.......................................................... 233,831
Convertible notes, net of
unamortized discount of $2,619,754.................................... 608,221
Stock payable to convertible note holders................................. 367,243
Notes payable............................................................. 2,485,253
---------------
Total Current Liabilities................................... 4,883,165
---------------
Commitments and Contingencies --

Stockholders' Equity
Convertible preferred stock, no par value,
10,000,000 shares authorized, none issued and outstanding............. --
Common stock, $.05 par value, 50,000,000 shares
authorized, 10,059,838 shares issued and outstanding.................. 502,992
Additional paid in capital................................................ 27,439,896
Deficit accumulated during the development stage.......................... (4,746,667)
---------------
Total Stockholders' Equity.................................... 23,196,221
---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................ $ 28,079,386
===============

See accompanying summary of accounting policies
and notes to consolidated financial statements

F-10

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
Year ended December 31, 2004 and the Period from January 22, 2003
(Inception) through December 31, 2003 and 2004

Inception Inception
through through
2004 2003 2004
---------------- ------------- --------------

General and administrative.................................... $3,127,488 $ 80,801 $3,208,289
Research and development...................................... 632,621 -- 632,621
---------------- ------------- --------------

Net operating loss................................... (3,760,109) (80,801) (3,840,910)

Interest income............................................... 5,992 -- 5,992
Other income.................................................. 2,379 -- 2,379
Interest expense.............................................. (868,926) (45,202) (914,128)
---------------- ------------- --------------

NET LOSS $ (4,620,664) $ (126,003) $ (4,746,667)
================ ============= ==============

Basic and diluted loss per share.............................. $(.73) N/A
Weighted average shares outstanding........................... 6,309,145 N/A

See accompanying summary of accounting policies
and notes to consolidated financial statements

F-11

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From January 22, 2003 (Inception) through December 31, 2004

Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage Total
----------- ------------- -------------- -------------

Shares issued for cash......................... 5,250,000 $1,000 $ -- $ 1,000
Shares repurchased and cancelled............... (1,706,250) (325) -- (325)
Discount relating to:
- beneficial conversion feature.............. -- 28,180 -- 28,180
- warrants attached to debt.................. -- 28,180 -- 28,180
Net loss ...................................... -- -- (126,003) (126,003)
----------- ------------- -------------- -------------
Balances at December 31, 2003 3,543,750 57,035 (126,003) (68,968)

Shares issued for:
- cash ...................................... 22,500 9,000 -- 9,000
- services................................... 2,065,000 849,000 -- 849,000
- license.................................... 242,688 427,075 -- 427,075
- reverse merger with Sportan................ 997,399 (147,733) -- (147,733)
- acquisition of Opexa....................... 2,500,000 23,750,000 -- 23,750,000
- additional shares attached to
convertible debt........................... 161,000 288,366 -- 288,366
- conversion of convertible notes............ 607,501 248,370 -- 248,370
Shares cancelled............................... (80,000) -- -- --
Offering costs relating to
convertible debt............................. -- (365,909) -- (365,909)
Discount relating to:
- beneficial conversion feature.............. -- 855,849 -- 855,849
- warrants attached to debt.................. -- 1,848,502 -- 1,848,502
Option expense................................. -- 123,333 -- 123,333
Net loss -- -- (4,620,664) (4,620,664)
----------- ------------- -------------- -------------

Balances at December 31, 2004.................. 10,059,838 27,942,888 $(4,746,667) $23,196,221
=========== ============= ============== =============
Less: par..................................... 502,992
-------------

Additional paid in capital..................... $27,439,896
=============

See accompanying summary of accounting policies
and notes to consolidated financial statements

F-12

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, 2004 and the Period from January 22, 2003
(Inception) through December 31, 2003 and 2004

Inception Inception
through through
2004 2003 2004
-------------- -------------- ----------------

Cash flows from operating activities
Net loss........................................... $(4,620,664) $ (126,003) $ (4,746,667)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Stock issued for services...................... 849,000 -- 849,000
Amortization of discount on
notes payable due to warrants
and beneficial conversion feature............ 753,812 42,755 796,567
Amortization of intangible assets.............. 251,761 -- 251,761
Depreciation................................... 13,058 -- 13,058
Option expense................................. 123,333 -- 123,333
Loss on disposition of fixed assets............ 457,122 -- 457,122
Changes in:
Accounts payable............................... 58,670 137 58,807
Prepaid expenses............................... (38,950) -- (38,950)
Accrued expenses............................... 23,822 7,504 31,326
-------------- -------------- ----------------
Net cash used in
operating activities............................. (2,129,036) (75,607) (2,204,643)
-------------- -------------- ----------------
Cash flows from investing activities
Purchase of licenses .............................. (232,742) -- (232,742)
Purchase of property & equipment................... (173,004) -- (173,004)
-------------- -------------- ----------------
Net cash used in
investing activities............................. (405,746) -- (405,746)
-------------- -------------- ----------------

Cash flows from financing activities
Common stock sold for cash......................... 9,000 1,000 10,000
Common stock repurchased and canceled (325) (325)
Payments on license notes payable.................. (5,000) -- (5,000)
Proceeds from debt................................. 3,382,706 75,000 3,457,706
-------------- -------------- ----------------
Net cash provided by
financing activities............................. 3,386,706 75,675 3,462,381
-------------- -------------- ----------------

Net change in cash................................... 851,924 68 851,992
Cash at beginning of year............................ 68 -- --
-------------- -------------- ----------------

Cash at end of year.................................. $ 851,992 $ 68 $851,992
============== ============== ================

See accompanying summary of accounting policies
and notes to consolidated financial statements

F-13

PHARMAFRONTIERS CORP.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued) Year ended December 31, 2004 and the Period from January 22, 2003
(Inception) through December 31, 2003 and 2004

Inception Inception
through through
2004 2003 2004
-------------- -------------- ----------------

NON-CASH TRANSACTIONS
Issuance of common stock for
purchase of Opexa................................ $23,750,000 $ -- $23,750,000
Issuance of common stock to
Sportan shareholders................................. 147,733 -- 147,733
Issuance of common stock for
University of Chicago license.................... 427,075 -- 427,075
Conversion of notes payable
to common stock.................................. 248,370 -- 248,370
Conversion of accounts payable
to note payable.................................. 93,364 -- 93,364
Discount on convertible notes
relating to:
- warrants....................................... 1,848,502 28,180 1,876,682
- beneficial conversion feature.................. 855,849 28,180 884,029
- stock attached to notes........................ 288,366 -- 288,366

See accompanying summary of accounting policies
and notes to consolidated financial statements

F-14

PHARMAFRONTIERS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

PharmaFrontiers Corp. ("Pharma") was incorporated in Texas on January
22, 2003 as a biopharmaceutical company engaged in developing autologous
personalized cell therapies. During the development stage, Pharma acquired the
worldwide license to technology developed at Argonne National Laboratory, a U.S.
Department of Energy Laboratory Operated by the University of Chicago
("Argonne"). This is an exclusive license to a stem cell technology in which
adult pluripotent stem cells are derived from monocytes obtained from the
patient's own blood. (the "License"). A patent application was filed in November
2003, with the United States Patent and Trade Office regarding the technology
involved in the License.

On October 7, 2004 Pharma entered into an agreement to acquire all of
the outstanding stock of Opexa Pharmaceuticals, Inc. ("Opexa"). The agreement
closed on November 5, 2004. A total of 2,500,000 shares of Pharma's common stock
were exchanged for all the outstanding stock of Opexa's of which 250,000 shares
is held in escrow and the balance of 2,250,000 was issued to Opexa's
shareholders in December 2004. The acquisition was accounted for under the
purchase method, where all of Opexa's assets are restated to their fair market
value on the acquisition date, which approximated book value. The 2,500,000
shares of Pharma were valued at $23,750,000 or $9.50 per share, which represents
their current value at the time. See note 12 for details.

Opexa holds rights to technology to diagnose and treat multiple
sclerosis through modified autoreactive T cells and is currently in FDA Phase
I/II human dose ranging clinical trials to evaluate its safety and effectiveness
in treating multiple sclerosis.

Basis of presentation. The consolidated financial statements include
the accounts of Pharma and its wholly-owned subsidiary, Opexa. Significant
inter-company accounts and transactions have been eliminated.

Reclassifications. Certain amounts in the 2003 consolidated financial
statements have been reclassified to conform to the 2004 consolidated financial
statement presentation.

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

Cash and cash equivalents. For purposes of the statements of cash
flows, cash equivalents include all highly liquid investments with original
maturities of three months or less.

Long-lived Assets. Property and equipment are stated on the basis of
historical cost less accumulated depreciation. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets. Major
renewals and improvements are capitalized, while minor replacements, maintenance
and repairs are charged to current operations.

F-15

Impairment losses are recorded on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount.

Income Taxes. Income tax expense is based on reported earnings before
income taxes. Deferred income taxes reflect the impact of temporary differences
between assets and liabilities recognized for consolidated financial reporting
purposes and such amounts recognized for tax purposes, and are measured by
applying enacted tax rates in effect in years in which the differences are
expected to reverse.

Stock-Based Compensation. Pharma accounts for stock-based compensation
under the intrinsic value method. Under this method, Pharma recognizes no
compensation expense for stock options granted when the number of underlying
shares is known and exercise price of the option is greater than or equal to the
fair market value of the stock on the date of grant. The following table
illustrates the effect on net loss and net loss per share if Pharma had applied
the fair value provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.

Inception Inception
through through
2004 2003 2004
------------- ---------------- ----------------

Net loss as reported........................ $(4,620,664) $ (126,003) $ (4,746,667)
Add: stock based compensation
determined under intrinsic
value-based method................... 123,333 -- 123,333

Less: stock based compensation
determined under fair value-
based method........................ (153,364) -- (153,364)
------------- ---------------- ----------------

Pro forma net loss.......................... $(4,650,695) $ (126,003) $ (4,776,698)

Basic and diluted net loss per common share:
As reported................................. $ (.73) N/A N/A
Pro forma................................... $ (.74) N/A N/A

The weighted average fair value of the stock options granted during
2004 was $3.09. Variables used in the Black-Scholes option-pricing model include
(1) 2% risk-free interest rate, (2) expected option life is the actual remaining
life of the options as of each year end, (3) expected volatility is from 0.1% to
796.30% and (4) zero expected dividends.

Basic and diluted net loss per share calculations are presented in
accordance with Financial Accounting Standards Statement 128, and are calculated
on the basis of the weighted average number of common shares outstanding during
the year. They include the dilutive effect of common stock equivalents in years
with net income. Basic and diluted loss per share is the same due to the absence
of common stock equivalents.

Research and development. Research and development expenses include
salaries and related employee expenses and consulting fees, facility costs, and
laboratory costs. All costs for research and development activities are expensed
as incurred. Pharma expenses the costs of licenses of patents and the
prosecution of patents until the issuance of such patents and the
commercialization of related products is reasonably assured.

F-16

Recently Issued Accounting Pronouncements:

In December 2004, the FASB issued SFAS No.123R, "Accounting for
Stock-Based Compensation" SFAS No.123R establishes standards for the accounting
for transactions in which an entity exchanges its equity instruments for goods
or services. This Statement focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions.
SFAS No.123R requires that the fair value of such equity instruments be
recognized as expense in the historical financial statements as services are
performed. Prior to SFAS No.123R, only certain pro forma disclosures of fair
value were required. SFAS No.123R shall be effective for small business issuers
as of the beginning of the first interim or annual reporting period that begins
after December 15, 2005. While Pharma has issued options to employees recently,
the adoption of this new accounting pronouncement is not expected to have a
material impact on the consolidated financial statements of Pharma during the
calendar year 2006.

Pharma does not expect the adoption of any other recently issued
accounting pronouncements to have a significant impact on their consolidated
financial position, results of operations or cash flow.

NOTE 2 - GOING CONCERN

As shown in the accompanying consolidated financial statements, Pharma
incurred recurring net losses of $4,620,664 and $126,003 in fiscal 2004 and
2003, respectively, has an accumulated deficit of $4,746,667 and a working
capital deficit of $3,936,836 as of December 31, 2004. These conditions raise
substantial doubt as to Pharma's ability to continue as a going concern.
Management is trying to raise additional capital through sales of convertible
debt and equity. The consolidated financial statements do not include any
adjustments that might be necessary if Pharma is unable to continue as a going
concern.

NOTE 3 - LICENSE AGREEMENT

In February 2004, Pharma entered into an agreement with the University
of Chicago ("University") for the worldwide license to technology developed at
Argonne National Laboratory, a U.S. Department of Energy Laboratory Operated by
the University. In consideration for the license, Pharma paid the University
$57,742 and agreed to issue 375,375 shares of its common stock. 187,688 shares
valued at $75,075 were issued on February 20, 2004. In December 2004, the
License Agreement was amended granting Pharma an exclusive, non-transferable
worldwide license to the University's stem cell technology. In consideration for
the amendment, Pharma paid the University an additional $175,000, issued the
University 55,000 shares of common stock valued at $352,000, bringing the total
ownership of Pharma by the University to 242,688 shares, agreed to pay the
University $1,500,000 on the earlier of October 30, 2005 or upon the closing of
a Pharma financing where proceeds are greater than $10 million and agreed to
issue the University shares of Pharma common stock, including the shares already
issued, equal to 2.6% of the total outstanding number of shares after conversion
of the 15% exchangeable convertible subordinated promissory notes upon the later
of the First financing or November 30, 2005 and after issuance of any and all
equity in the form of stock at the close of the first Financing.

In June of 2004, Pharma paid $50,000 to The University of Texas MD
Anderson Cancer Center for the option to negotiate a licensing agreement for the
use of peripheral blood stem cells for cardiac regeneration. The option to
negotiate the licensing agreement expired on September 21, 2004 and the
non-refundable fee of $50,000 was written off at the end of the fourth quarter.

F-17

NOTE 4 - INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 2004:

Description Life Amount
- ----------------------------------------------------------- -------------------- --------------------------

University of Chicago license (see note 3)................. 19 years $ 3,051,706
Opexa intangible group (see note 12)....................... 16 years 23,991,128
--------------------------
27,042,834
Less: accumulated amortization............................. (251,761)
--------------------------
$26,791,073
==========================

Amortization expense totaled $251,761 and $0 in fiscal 2004 and 2003,
respectively.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at June 30, 2004:

Description Life Amount
- ----------------------------------------------------------- -------------------- --------------------------

Leasehold improvements........................................ 5 years $ 29,795
Computer equipment............................................ 3 years 50,669
Office furniture and equipment................................ 3-5 years 224,218
Laboratory equipment.......................................... 5-10 years 221,620
--------------------------
526,302
Less: accumulated depreciation................................ (184,318)
--------------------------
$ 341,984
==========================

Depreciation expense totaled $13,058 and $0 in fiscal 2004 and 2003,
respectively.

NOTE 6 - INCOME TAXES

Pharma uses the liability method, where deferred tax assets and
liabilities are determined based on the expected future tax consequences of
temporary differences between the carrying amounts of assets and liabilities for
financial and income tax reporting purposes. During fiscal 2004 and 2003, Pharma
incurred net losses and, therefore, has no tax liability. The net deferred tax
asset generated by the loss carry-forward has been fully reserved. The
cumulative net operating loss carry-forward is approximately $3,000,000 at
December 31, 2004, and will expire in the years 2023 through 2024.

At December 31, 2004, deferred tax assets consisted of the following:

Deferred tax assets
Net operating losses............................. $ 1,020,000
Less: valuation allowance....................... (1,020,000)
----------------------
Net deferred tax asset............................. $ --
======================

F-18

NOTE 7 - THIRD PARTY CONVERTIBLE NOTES & STOCK PAYABLE TO NOTE HOLDERS

During 2004, Pharma issued convertible notes to investors totaling
$3,227,975. A description of the notes is as follows:

o Additional shares: For each $100,000 loaned to Pharma, 10,000 shares
of common stock will be issued.

The proceeds from the notes have been discounted for the relative fair
value of the warrants, the stock, and beneficial conversion feature. All
discounts will be amortized over the life of the notes. As of December 31, 2004,
the stock has not been issued. A summary of the notes is as follows:

F-19

Notes Payable Stock
Payable
--------------- -------------------

Gross proceeds from notes........................................ $ 3,227,975 $ --
Less: Relative fair value of:
stock payable to note holders............................ (655,608) 655,608
warrants................................................. (1,782,510) --
beneficial conversion feature............................ (789,857) --
amounts already issued................................... -- (288,365)
Add: amortization of discounts................................... 608,221 --
--------------- -------------------
Carrying amount of notes and stock on
December 31, 2004.............................................. $ 608,221 $ 367,243
=============== ===================

As of December 31, 2004, Pharma had only issued 161,000 of the 322,978
additional common shares due to note holders. The relative fair value of the
remaining 161,978 shares totaled $367,243 and is accrued as of December 31,
2004.

NOTE 8 - NOTES PAYABLE TO

Notes payable to third parties consists of the following:

Note payable to a vendor for services;
12% interest; due in February 2005;
unsecured............................................................ $ 58,614
Note payable to individual; interest of
12%; due on demand; unsecured........................................ 34,750
Note payable to the University of Chicago;
no interest; due earlier of Pharma raising
$10,000,000 in an Equity Financing or
October 30, 2005; secured by license
(see note 3 for details)............................................. 1,500,000
Stock payable to the University of Chicago
equal to 2.6% of outstanding shares; no interest; due later of Pharma raising
$10,000,000 in an Equity Financing or November 30, 2005; secured by license
(see note 3 for details)............................................. 891,889
---------------
Total $2,485,253
===============

NOTE 9 - STOCK PURCHASE AGREEMENT

In June 2004, Pharma was acquired by Sportan United Industries, Inc. in a
transaction accounted for as a reverse acquisition. Pharma's shareholders were
issued 6,386,439 Sportan shares in exchange for 100 percent of the outstanding
common shares of Pharma. Immediately following this transaction, Sportan changed
its name to Pharma and 7,383,838 shares were outstanding.

F-20

NOTE 10 - EQUITY

In 2003, Pharma sold 5,250,000 shares of common stock for $1,000 in
cash. On April 2, 2003, 1,706,250 shares were reacquired for $325 and canceled.

Additional contributions to capital of $56,360 resulted from the
discounted value to notes payable due to warrants and beneficial conversion
features attached to convertible notes issued in 2003.

During 2004, 22,500 shares of common stock were sold for $9,000 in
cash.

During 2004, 2,065,000 shares of common stock valued at their then fair
value of $849,000 were issued to Pharma's employees and consultants for their
services.

In February 2004, 187,688 shares of common stock valued at their then
fair value of $75,075 were issued to the University of Chicago per the terms of
a license agreement. In December 2004, 55,000 shares of common stock valued at
their then fair value of $352,500 were issued to the University of Chicago per
the terms of an amended license agreement. See note 3 for details.

In June 2004, 997,399 shares of common stock were issued for net
liabilities of $147,733 to Sportan's shareholders for the reverse merger with
Sportan. See note 9 for details.

In November 2004, 2,500,000 shares of common stock valued at their then
fair value of $23,750,000 were issued to 30 accredited investors in connection
with the acquisition of Opexa Pharmaceuticals, of which 250,000 shares are
subject to an escrow agreement. See note 12 for details.

In December 2004, 161,000 shares of common stock with a relative fair
value of $288,366 were issued to note holders as their additional shares for
their subscription investment in Pharma. See note 7 for details.

During 2004, 607,501 shares of common stock were issued to note holders
for the conversion of $248,370 of principal and interest from convertible notes.

In November 2004, 80,000 shares of common stock were cancelled pursuant
to the terms of an employment separation agreement.

Offering costs of $365,909 related to the convertible notes issued in
2004 that are mandatorily convertible were charged to additional paid in
capital. Additional contributions to capital of $2,827,684 relating to the
discounted value to notes payable from warrants and beneficial conversion
features attached to convertible notes issued in 2004. See note 7 for details.

NOTE 11 - STOCK OPTION PLAN

In 2004 Pharma adopted the 2004 Stock Option Plan ("the Plan"). The
Plan provides for the granting of stock options to employees and consultants of
Pharma.

Options granted under the Plan may be either incentive stock options or
nonqualified stock options. Incentive stock options ("ISO") may be granted only
to Pharma employees (including officers and directors who are also employees).
Nonqualified stock options ("NSO") may be granted to Pharma employees and
consultants. The Board of Directors has discretion to determine the number,
term, exercise price and vesting of all grants. 150,000 warrants were granted to
investors related to the convertible notes in 2003. 1,165,000 options were
granted to employees and consultants in 2004 and 1,427,993 warrants were granted
to investors related to the convertible notes in 2004.

F-21

Summary information regarding options is as follows:

Weighted Weighted
Average Average
Exercise Exercise
Options Price Warrants Price
------------- ------------- ----------- -------------

Year ended December 31, 2003:
Granted................................... -- $ -- 150,000 $ .10
Outstanding at December 31, 2003............ -- -- 150,000 .10
Year ended December 31, 2004:
Granted..................................... 1,165,000 3.22 1,427,993 2.29
Outstanding at December 31, 2004............ 1,165,000 $ 3.22 1,577,993 $ 2.08
============= ============= ============ =============

Options and warrants outstanding and exercisable as of December 31, 2004:

Options Options Warrants Warrants
Exercise Price Remaining Life Outstanding Exercisable Outstanding Exercisable
- ------------------ ---------------- ------------- ------------- ------------- -------------

$5.00 5 years 130,000 -- -- --
3.00 5 years 1,035,000 23,333 -- --
3.00 1 year -- -- 1,075,991 1,075,991
.10 1 year -- -- 502,002 502,002
------------- ------------- ------------- -------------
1,165,000 23,333 1,577,993 1,577,993
============= ============= ============= =============

As of December 31, 2004, there were no options or warrants outstanding to
purchase Opexa common stock.

NOTE 12 - PURCHASE OF OPEXA

On October 7, 2004 Pharma entered into an agreement to acquire all of
the outstanding stock of Opexa. The agreement closed on November 5, 2004. Pharma
issued Opexa shareholders 2,500,000 shares of Pharma's common stock for all of
the outstanding stock of Opexa. 250,000 of the 2,500,000 shares were put in
escrow. The acquisition was accounted for under the purchase method, where all
of Opexa's assets are restated to their fair market value on the acquisition
date, which approximated book value. The 2,500,000 shares of Pharma were valued
at their then fair value of $23,750,000 or $9.50 per share.

Pharma acquired Opexa because Opexa holds rights to technology to
diagnose and treat multiple sclerosis through modified autoreactive T cells and
is currently in FDA Phase I/II human dose ranging clinical trials to evaluate
its safety and effectiveness in treating multiple sclerosis.

The results of operations for Opexa from November 6, 2004 through
December 31, 2004 are included in the Statement of Expenses and the Statement of
Cash Flows.

F-22

The following table summarizes the estimated fair values of the assets
acquired and the liabilities assumed at the date of acquisition:

Current assets............................................... $ 55,387
Property, plant and equipment, net........................... 639,160
Intangible assets............................................ 23,991,128
----------------
Total assets acquired........................................ 24,685,675
----------------
Current liabilities.......................................... 935,675
----------------
Total liabilities assumed.................................... 935,675
----------------
Net assets acquired.......................................... $23,750,000
================

Of the $23,991,128 of acquired intangible assets, the full amount is
assigned to an inseparable group of patents and licenses that cannot function
independently by themselves. The weighted average useful life of the intangible
group as of December 31, 2004 is approximately 16.5 years.

The following shows the pro forma results of operations as though the
purchase of Opexa had been completed as of January 1, 2003:

Inception
through
2004 2003
--------------- ---------------

General and administrative................................... $4,289,023 $1,482,810
Research and development..................................... 2,383,780 1,408,904
--------------- ---------------
Net operating loss............................... (6,672,803) (2,891,714)

Interest income.............................................. 11,649 21,406
Other income................................................. 28,008 602
Interest expense............................................. (869,661) (45,202)
--------------- ---------------
NET LOSS..................................................... $ (7,502,807) $ (2,914,908)
=============== ===============
Basic and diluted loss per share............................. $(1.19) N/A

Weighted average shares outstanding.......................... 6,309,145 N/A

NOTE 13 - BOARD OF DIRECTORS AGREEMENTS

In April and May of 2004, Pharma entered into agreements with four
individuals that will comprise Pharma's Board of Directors. The agreements
resulted in the authorization of 200,000 shares of common stock and compensation
of $51,000 per year.

F-23

NOTE 14 - COMMITMENT AND CONTINGENCIES

In 2003 and part of 2004, Pharma's principal office was in the office
of one of Pharma's shareholders pursuant to a verbal agreement on a rent-free
month-to-month basis.

After purchasing Opexa, Pharma assumed an eighteen-month operating
lease from Opexa for a research facility. The lease commenced in June 2003 and
was due to expire in November 2004. Pharma extended the lease until March 31,
2005. Pharma has the option to exercise two 5 year renewals extending the lease
to March 31, 2010 and if the second option is exercised, extending the lease to
March 31, 2015. Basic rent expense charged to operations for fiscal 2004 and
2003 was $14,234 and $0 respectively.

Future minimum lease payments under the non-cancelable operating lease
are $21,351 for 2005 and none thereafter.

NOTE 15 - SUBSEQUENT EVENTS

On February 14, 2005 Pharma completed the second traunch of a private
offering of 15% convertible promissory notes (the "notes") and issued notes with
an aggregate principal amount of $6.1 million. The notes are mandatorily
exchangeable for common stock at the earlier of an "Equity Financing" (as
defined below) or upon maturity on November 30, 2005. The notes and accrued
interest are convertible at a conversion price equal to the weighted average
gross offering price of the common stock or common stock equivalents issued in
an Equity Financing. If no such Equity Financing occurs, the notes and accrued
interest are convertible at $3.00 per share on November 30, 2005. An "Equity
Financing" is defined as Pharma raising at least $10,000,000 in one or a series
of transactions of common stock or common stock equivalents prior to the
maturity of the notes. As additional consideration for the purchase of notes,
Pharma issued to investors an aggregate of 612,468 shares of common stock and,
upon the earlier of an Equity Financing or maturity of the notes, each investor
will receive a one-year warrant to purchase shares of common stock. Each warrant
will be exercisable for that number of shares of common stock equal to the
principal amount of the note divided by the warrant's exercise price. The
warrant's exercise price will be equal to 50% of the weighted average gross
offering price of equity issued in an Equity Financing or, if there is no Equity
Financing, $3.00 per share.

F-24

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses, other than the
underwriting discounts and commissions, payable by the registrant in connection
with the sale of the securities being registered. All amounts are estimates
except the Securities and Exchange Commission registration fee.

Securities and Exchange Commission Registration Fee $ 12,911
Printing Costs 3,000
Legal Fees and Expenses 50,000
Accounting Fees and Expenses 15,000
Transfer Agent and Registrar Fees 3,000
Miscellaneous 10,000
Total $ -----------------
93,056
=================

Item 14. Indemnification of Directors and Officers.

The Company has the authority under Articles 2.02a(16) and 2.02-1 of
the Texas Business Corporation Act ("TBCA") to indemnify its directors and
officers to the extent provided for in such statute. The TBCA provides, in part,
that a corporation may indemnify a director or officer or other person who was,
is or is threatened to be made a named defendant or respondent in a proceeding
because such person is or was a director, officer, employee or agent of the
corporation, if it is determined that such person: (1) conducted himself in good
faith; (2) reasonably believed, in the case of conduct in his official capacity
as a director or officer of the corporation, that his conduct was in the
corporation's best interest and, in all other cases, that his conduct was at
least not opposed to the corporation's best interests; and (3) in the case of
any criminal proceeding, had no reasonable cause to believe that his conduct was
unlawful.

A corporation may indemnify a person under the TBCA against judgments,
penalties, including excise and similar taxes, fines, settlement, unreasonable
expenses actually incurred by the person in connection with the proceeding. If
the person is found liable to the corporation or is found liable on the basis
that personal benefit was improperly received by the person, the indemnification
is limited to reasonable expenses actually incurred by the person in connection
with the proceeding, and shall not be made in respect of any proceeding in which
the person shall have been found liable for willful or intentional misconduct in
the performance of his duty to the corporation. The corporation may also pay or
reimburse expenses incurred by a person in connection with his appearance as a
witness or other participation in a proceeding at a time when he is not a named
defendant or respondent in the proceeding.

The Company's Articles of Incorporation provide that none of its
directors shall be personally liable to the Company or its shareholders for
monetary damages for an act or omission in such director's capacity as a
director; provided, however, that the liability of such director is not limited
to the extent that such director is found liable for (1) a breach of the
director's duty of loyalty to the Company or its shareholders, (2) an act or
omission not in good faith that constitutes a breach of duty of the director to
the Company or an act or omission that involves intentional misconduct or a
knowing violation of the law, (3) a transaction from which the director received
an improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, or (4) an act or omission for which
the liability of the director is expressly provided by an applicable statute.

II-1

The Company believes that these provisions will assist it in attracting
and retaining qualified individuals to serve as executive officers and
directors. The inclusion of these provisions in the Company's Articles of
Incorporation may have the effect of reducing a likelihood of derivative
litigation against the Company's 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 us or our shareholders.

The Company's Articles of Incorporation and By-laws provide that the
Company may indemnify its officers, directors, agents and any other persons to
the fullest extent permitted by the TCBA.

Additionally, under their employment agreements with PharmaFrontiers
Corp. Messrs. McWilliams and Rouse are entitled to indemnification in their
capacity as officers of the Company to the fullest extent permitted by the TCBA.

Item 15. Recent Sales of Unregistered Securities.

Acquisition of PharmaFrontiers Corp.

On June 4, 2004, when the company was named "Sportan United Industries,
Inc.," it issued, 6,386,439 shares of common stock to the shareholders of
PharmaFrontiers Corp., a Texas corporation ("PharmaFrontiers") in exchange for
all the outstanding capital stock of PharmaFrontiers. The shares of common stock
issued in the acquisition were offered and sold pursuant to the exemption from
registration afforded by Rule 506 under the Securities Act of 1933 (the
"Securities Act") and/or Section 4(2) of the Securities Act. The Company
subsequently changed its name to "PharmaFrontiers Corp."

Acquisition of OPEXA

In connection with the closing of the Company's acquisition of OPEXA
Pharmaceuticals, Inc., a Delaware corporation ("OPEXA"), on November 5, 2004,
the Company issued 2,500,000 shares of its common stock, par value $0.05 per
share, to the former holders of common stock of OPEXA in exchange for their
OPEXA common stock. The shares of common stock issued in the acquisition were
offered and sold pursuant to the exemption from registration afforded by Rule
506 under the Securities Act and/or Section 4(2) of the Securities Act. On June
9, 2005 the Company issued 200,000 shares of common stock to Sanders Morris
Harris, Inc. in exchange for advisory services provided in connection with the
acquisition of OPEXA. The shares were sold pursuant to the exemption from
registration afforded by Rule 504 under the Securities Act of 1933 (the
"Securities Act") and/or Section 4(2) of the Securities Act.

15% Exchangeable Convertible Subordinated Note Private Placement
Financing and Subsequent Exchange

During the six months ended February 15, 2005, the Company issued to
accredited investors in a private placement: (i) 15% Exchangeable Convertible
Notes with a principal amount of $6.1 million, (ii) an aggregate of 612,688
shares of common stock, and (iii) a right to receive a warrant to purchase
common stock. The Company received gross proceeds of $6.1 million from this
private placement. The securities issued in the acquisition were offered and
sold pursuant to the exemption from registration afforded by Rule 506 under the
Securities Act of 1933 (the "Securities Act") and/or Section 4(2) of the
Securities Act. In connection with this private placement, the Company entered
into Registration Rights Agreements with the purchasers requiring that, among
other things, the Company register the shares issued, those shares issuable on
conversion of the notes and those shares issuable upon exercise of the warrant
for resale under the Securities Act.

II-2

In addition, the Company issued to the placement agents who assisted
with the sale of the Notes, warrants to purchase 216,875 shares of Common Stock
at a price of $1.50 per share. These warrants expire on February 14, 2010. The
Company is obligated to register for resale the shares of common stock issuable
upon exercise of the warrants.

On June 30, 2005 the Company, in exchange for all outstanding 15%
Exchangeable Convertible Subordinated Notes and the associated rights to
warrants, issued to the accredited investors holding the notes: (i) an aggregate
of 5,658,575 shares of our common stock, (ii) Series A Warrants to purchase an
aggregate of 5,541,998 shares of our common stock, (iii) Series B Warrants to
purchase an aggregate of 2,216,799 shares of our common stock, and (iv) Series C
Warrants to purchase an aggregate of 4,433,598 shares of our common stock. In
connection with this exchange offering, the Company entered into a Registration
Rights Agreement dated June 17, 2005 with the participants in the exchange offer
requiring that, among other things, the Company register the shares issued in
the exchange offer and issuable upon exercise of the warrants, for resale under
the Securities Act.

The notes and shares of common stock and warrants described above were
offered and sold pursuant to the exemption from registration afforded by Rule
506 under the Securities Act, Section 3(a)(9) of the Securities Act and/or
Section 4(2) of the Securities Act.

Sale of Common Stock, Series A Warrants, Series B Warrants and Series
C Warrants

In the month ended July 15, 2005, the Company completed a private
placement to accredited investors of (i) an aggregate of 3,894,509 shares of
common stock (ii) Series A Warrants to purchase an aggregate of 4,868,149 shares
of our common stock, (iii) Series B Warrants to purchase an aggregate of
1,947,267 shares of our common stock, and (iv) Series C Warrants to purchase an
aggregate of 3,894,509 shares of our common stock. The securities were sold at a
per share price of $1.50, with each share purchased the purchaser received a
Series A Warrant to Purchase one and a quarter shares of common stock, A Series
B Warrant to purchase one half of a share of common stock and a Series C Warrant
to purchase one share of common stock. The sales were made pursuant to the terms
of Securities Purchase Agreements dated June 17, 2005 and July 15, 2005 by and
among the Company and each of the purchasers. In connection with this private
placement, the Company entered into a Registration Rights Agreement dated June
17, 2005 and July 15, 2005 with the purchasers requiring that, among other
things, the Company register the shares for resale under the Securities Act.

In addition, the Company issued to the placement agents assisting with
the private placement, warrants (the "Placement Agent Warrants") to purchase
243,972 shares of common stock at an exercise price of $1.50 per share. The
Placement Agent Warrants are exercisable until June 17, 2010. The Company is
obligated to register for resale the shares of common stock issuable upon
exercise of the Placement Agent Warrants.

The shares of common stock and warrants described above were offered
and sold pursuant to the exemption from registration afforded by Rule 506 under
the Securities Act and/or Section 4(2) of the Securities Act.

Shares of Common Stock Issued To the University of Chicago

Pursuant to the terms of a First Amended and Restated License Agreement
(the "License Agreement") dated December 30, 2004 with the University of
Chicago, the Company has issued 534,624 shares of common stock in consideration
of the license granted to the Company. The License Agreement obligates the
Company, for a period of time, to issue sufficient shares so as to enable the
University of Chicago to maintain a certain percentage ownership. Thus the
shares were issued from time to time as the Company issued shares in connection
with its various offerings. The shares of common stock were offered and sold
pursuant to the exemption from registration afforded by Section 4(2) under the
Securities Act. In connection with the License Agreement, the Company agreed to
register the shares issued thereunder for resale under the Securities Act.

II-3

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits. The following exhibits of the Company are included
herein.

------------------------ --------------------------------------------------------------------------------
Exhibit 2.1 Stock Purchase Agreement (incorporated by reference to Exhibit 2.1 to the
Company's Current Report on Form K filed June 4, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 2.2 Merger Agreement (incorporated by reference to Exhibit 2.1 to the Company's
Current Report on 8-K filed October 8, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to
Exhibit A to the Company's Definitive Information Statement filed on June 29,
2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 3.2 By-laws
------------------------ --------------------------------------------------------------------------------
Exhibit 4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 2.3 to
the Company's Registration Statement on Form 10-SB (File No. 000-25513),
initially filed March 8, 1999
------------------------ --------------------------------------------------------------------------------
Exhibit 5.1(1) Opinion of Vinson & Elkins L.L.P.
------------------------ --------------------------------------------------------------------------------
Exhibit 10.1 2004 Compensatory Stock Option Plan (incorporated by reference to Exhibit B to
the Company's Definitive Information Statement filed on June 29, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.2 Employment Agreement of David McWilliams (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB filed November
16, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.3 Second Amended Employment Agreement of William Rouse (incorporated by
reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed
February 4, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.4 Amended Employment Agreement of Warren C. Lau (incorporated by reference to
Exhibit 99.2 to the Company's Current Report on Form 8-K filed February 4,
2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.5 Director's Agreement of David McWilliams (incorporated by reference to Exhibit
10.4 to the Company's Quarterly Report on Form 10-QSB filed November 16, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.6 Director's Agreement of Robert H. Gow (incorporated by reference to Exhibit
10.6 to the Company's Annual Report on Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.7 Director's Agreement of Paul Frison (incorporated by reference to Exhibit 10.7
to the Company's Annual Report on Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------

II-4

------------------------ --------------------------------------------------------------------------------
Exhibit 10.8 Director's Agreement of Tony Kamin (incorporated by reference to Exhibit 10.8
to the Company's Annual Report on Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.9 Director's Agreement of Brian Rodriguez (incorporated by reference to Exhibit
10.2 to the Company's Quarterly Report on Form 10-QSB filed November 16, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.10 Scientific Board Advisory Agreement of Yong Zhao (incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-QSB filed November
16, 2004)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.11 Termination Settlement and Release Agreement with R. Wayne Fritzsche
(incorporated by reference to Exhibit 99.3 to the Company's Current Report on
Form 8-K filed February 4, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.12 Form of Warrant Agreement (incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.13 Amended and Restated License Agreement with Baylor College of Medicine
(incorporated by reference to Exhibit 10.14 to the Company's Annual Report on
Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.14 Amended and Restated License Agreement with University of Chicago
(incorporated by reference to Exhibit 10.15 to the Company's Annual Report on
Form 10-KSB filed April 15, 2005)
------------------------ --------------------------------------------------------------------------------
Exhibit 10.15(2) Form of Series A Common Stock Purchase Warrant
------------------------ --------------------------------------------------------------------------------
Exhibit 10.16(2) Form of Series B Common Stock Purchase Warrant
------------------------ --------------------------------------------------------------------------------
Exhibit 10.17(2) Form of Series C Common Stock Purchase Warrant
------------------------ --------------------------------------------------------------------------------
Exhibit 10.18(2) Securities Purchase Agreement dated June 17, 2005 by and among the Company and
the Investors named therein.
------------------------ --------------------------------------------------------------------------------
Exhibit 10.19(2) Registration Rights Agreement dated June 17, 2005 by and among the purchasers
of common stock named therein
------------------------ --------------------------------------------------------------------------------
Exhibit 10.20(2) Securities Purchase Agreement dated June 30, 2005 by and among the Company and
the purchasers of common stock named therein
------------------------ --------------------------------------------------------------------------------
Exhibit 10.21(2) Securities Purchase Agreement dated July 15, 2005 by and among the Company and
the Investors named therein.
------------------------ --------------------------------------------------------------------------------
Exhibit 10.22(2) Registration Rights Agreement dated July 15, 2005 by and among the Company and
the Investors named therein.
------------------------ --------------------------------------------------------------------------------
Exhibit 23.1(2) Consent of Malone & Bailey, PC
------------------------ --------------------------------------------------------------------------------

II-5

------------------------ --------------------------------------------------------------------------------
Exhibit 23.2 (1) Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1)
------------------------ --------------------------------------------------------------------------------

(1) Filed herewith.

(2) Previously filed.

(b) Financial Statement Schedules.

All schedules are omitted because they are inapplicable or the
requested information is shown in the consolidated financial statements of the
registrant or related notes thereto.

Item 17. Undertakings.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and

(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.

(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 9th day of August, 2005.

PHARMAFRONTIERS CORP.

By: /s/ David B. McWilliams
------------------------------------
Name: David B. McWilliams
Title: Chief Executive Officer

By: /s/ C. William Rouse
------------------------------------
Name: C. William Rouse
Title: Chief Financial Officer and
Principal Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date

/s/ Robert H. Gow* Chairman of the Board and Director August 9, 2005
------------------------------------------
Robert H. Gow

/s/ David B. McWilliams President, Chief Executive Officer and August 9, 2005
------------------------------------------
David B. McWilliams Director (principal executive officer)

/s/ C. William Rouse Chief Financial Officer August 9, 2005
------------------------------------------
C. William Rouse (principal financial and accounting officer)

/s/ Anthony N. Kamin* August 9, 2005
------------------------------------------
Anthony N. Kamin Director

/s/ Paul M. Frison* August 9, 2005
------------------------------------------
Paul M. Frison Director

/s/ Brian E. Rodriguez* August 9, 2005
------------------------------------------
Brian E. Rodriguez Director

By: /s/ David B. McWilliams
-------------------------------
Attorney-in-Fact
(under power of attorney filed as part
of the initial registration statement)

SIGNATURE PAGE FOR
FORM SB-2 - REGISTRATION STATEMENT