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<SEC-DOCUMENT>0000894158-05-000006.txt : 20050715
<SEC-HEADER>0000894158-05-000006.hdr.sgml : 20050715
<ACCEPTANCE-DATETIME>20050715120931
ACCESSION NUMBER:		0000894158-05-000006
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030630
FILED AS OF DATE:		20050715
DATE AS OF CHANGE:		20050715

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHEFFIELD PHARMACEUTICALS INC
		CENTRAL INDEX KEY:			0000894158
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				133808303
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12584
		FILM NUMBER:		05956404

	BUSINESS ADDRESS:	
		STREET 1:		1220 GLENMORE DRIVE
		CITY:			APOPKA
		STATE:			FL
		ZIP:			32712
		BUSINESS PHONE:		407-880-2213

	MAIL ADDRESS:	
		STREET 1:		1220 GLENMORE DRIVE
		CITY:			APOPKA
		STATE:			FL
		ZIP:			32712

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SHEFFIELD MEDICAL TECHNOLOGIES INC
		DATE OF NAME CHANGE:	19940606
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>sffp-qsb.htm
<DESCRIPTION>FORM 10-QSB FOR THE PERIOD ENDED JUNE 30, 2003
<TEXT>
<html>

<head>
<title>qsb</title>
</head>

<body>

<hr SIZE="4" NOSHADE COLOR="#000000">

<hr SIZE="2" NOSHADE COLOR="#000000">

<p ALIGN="CENTER"><b><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="4">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION<br>
</font><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">Washington, D.C. 20549<br>
</font></b><font SIZE="4" FACE="Times New Roman, Times, Serif">___________________<br>
<br>
<strong>FORM 10-QSB<br>
</strong>___________________</font></p>

<p ALIGN="CENTER">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt 0.5in; COLOR: windowtext; TEXT-INDENT: -0.5in"
align="center"><b><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" face="Wingdings"
size="3">&#253</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 3pt" size="1">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" size="3">QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
style="FONT-WEIGHT: bold; FONT-SIZE: 10pt" face="Times New Roman" size="2"><b>For the
quarterly period ended June 30, 2003</b></font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><b><font
style="FONT-WEIGHT: bold; FONT-SIZE: 10pt" face="Times New Roman" size="2">OR</font></b></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt 0.5in; COLOR: windowtext; TEXT-INDENT: -0.5in"
align="center"><b><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" face="Wingdings"
size="3">o</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 3pt" size="1">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font style="FONT-WEIGHT: bold; FONT-SIZE: 12pt" size="3">TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center">&nbsp;</p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center"><font
style="FONT-WEIGHT: bold; FONT-SIZE: 10pt" face="Times New Roman" size="2">For the
transition period from
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style="MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center" align="center">&nbsp;</p>

<p style="FONT-SIZE: 10pt; MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center"
align="center"><b><font style="FONT-WEIGHT: bold; FONT-SIZE: 10pt" face="Times New Roman"
size="2">Commission file</font><font style="FONT-WEIGHT: bold"> number 01-12584</font></b></p>

<p style="FONT-SIZE: 10pt; MARGIN: 0in 0in 0pt; COLOR: windowtext; TEXT-ALIGN: center"
align="center">&nbsp;</p>

<p ALIGN="center"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="5"><b>SHEFFIELD
PHARMACEUTICALS, INC.<br>
</b></font><font face="TIMES NEW ROMAN, TIMES, SERIF" size="1">(Exact Name Of Registrant
As Specified In Its Charter)</font></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="CENTER" WIDTH="55%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>Delaware</u></font></p>
    </div></td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td ALIGN="CENTER" WIDTH="40%" COLSPAN="3"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><font
    FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u><p>13-3808303</u></font></p>
    </div></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="CENTER" WIDTH="55%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="1">(State of Incorporation)</font></p>
    </div></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="CENTER" WIDTH="40%" COLSPAN="3"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="1">(I.R.S. Employer Identification No.)</font></p>
    </div></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="CENTER" WIDTH="55%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><font
    FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><p></font>&nbsp;</p>
    </div></td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td WIDTH="3%">&nbsp;&nbsp;&nbsp;&nbsp;</td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp; </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp; </td>
    <td>&nbsp;&nbsp;&nbsp;&nbsp; </td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="CENTER" WIDTH="55%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><u><p></u><font
    size="2">1220 Glenmore Drive, Apopka, FL 32712</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="CENTER" WIDTH="40%" COLSPAN="3"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><u><p><font
    size="2">32712</font></u></p>
    </div></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="CENTER" WIDTH="55%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="1">(Address of Principal Executive Offices)</font></p>
    </div></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="1">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="CENTER" WIDTH="40%" COLSPAN="3"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="1">(ZIP Code</font></p>
    </div></td>
  </tr>
</table>

<p align="center"><font size="2">&nbsp;Registrant's Telephone Number, Including Area Code:
(407) 880-2213</font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;Yes&nbsp;&nbsp;[
&nbsp; ]&nbsp;&nbsp;No&nbsp;[X]<br>
<br>
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). [ ] Yes [X] No </font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">At June 30, 2003,
the Registrant had 29,563,712 shares of common stock outstanding.</font></p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<hr SIZE="2" NOSHADE COLOR="#000000">

<hr SIZE="4" NOSHADE COLOR="#000000">

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>

<hr NOSHADE SIZE="5">
<font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">

<hr SIZE="1" NOSHADE COLOR="#000000">
</font>

<p ALIGN="CENTER"><a name="TABLE OF CONTENTS"><strong><font size="2">TABLE OF CONTENTS</font></strong></a></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
  <tr VALIGN="BOTTOM">
    <th nowrap ALIGN="LEFT"><font face="Times New Roman" size="2">Item</font><hr SIZE="1"
    NOSHADE COLOR="#000000" ALIGN="LEFT" WIDTH="22%">
    </th>
    <th></th>
    <th></th>
    <th></th>
    <th nowrap ALIGN="LEFT"><font face="Times New Roman" size="2">Description</font><hr
    SIZE="1" NOSHADE COLOR="#000000" ALIGN="LEFT" WIDTH="60%">
    </th>
    <th COLSPAN="3" nowrap><font face="Times New Roman" size="2">Page</font><hr SIZE="1"
    NOSHADE COLOR="#000000" WIDTH="22%">
    </th>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="CENTER" WIDTH="12%" COLSPAN="8"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2"><strong>PART I - FINANCIAL INFORMATION<br>
    </strong></font></p>
    </div></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 1.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><a
    HREF="#a050"><p></a><font size="2">&nbsp; <a href="#ITEM 1.&nbsp;FINANCIAL STATEMENTS">FINANCIAL
    STATEMENTS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">3</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 2.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><a
    HREF="#a051"><p></a><font size="2">&nbsp; <a
    href="#ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION">MANAGEMENT'S
    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION</a>.</font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">3</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td ALIGN="LEFT" WIDTH="12%"><font size="2">ITEM 3.</font></td>
    <td WIDTH="3%"></td>
    <td WIDTH="3%"></td>
    <td WIDTH="3%"></td>
    <td ALIGN="LEFT" WIDTH="75%"><font size="2">&nbsp; <a
    href="#ITEM 3. CONTROLS AND PROCEDURES">CONTROLS AND PROCEDURES.</a></font></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap></td>
    <td ALIGN="RIGHT"><font size="2">4</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="center" WIDTH="12%" COLSPAN="8" bgcolor="#00FFFF"><div
    STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font size="2"><strong>PART II - OTHER
    INFORMATION<br>
    </strong></font></p>
    </div></td>
  </tr>
  <tr>
    <td><font size="2">&nbsp; </font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 1.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp; <a href="#ITEM 1. LEGAL PROCEEDINGS">LEGAL PROCEEDINGS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">4</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 2.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp; <a href="#ITEM 2. CHANGES IN SECURITIES">CHANGES IN SECURITIES.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">4</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 3.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp; <a href="#ITEM 3.&nbsp;DEFAULTS UPON SENIOR SECURITIES">DEFAULT UPON
    SENIOR SECURITIES.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT" VALIGN="TOP"><font size="2">4</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 4.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp; <a
    href="#ITEM 4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS">SUBMISSION OF
    MATERS TO A VOTE OF SECURITY HOLDERS.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">5</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr VALIGN="TOP" BGCOLOR="#66FFFF">
    <td ALIGN="LEFT" WIDTH="12%"><div STYLE="MARGIN-LEFT: 0px; TEXT-INDENT: 0px"><p><font
    size="2">ITEM 5.</font></p>
    </div></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td WIDTH="3%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="LEFT" WIDTH="75%"><div STYLE="MARGIN-LEFT: 10px; TEXT-INDENT: -10px"><p><font
    size="2">&nbsp; <a href="#ITEM 5.&nbsp;OTHER INFORMATION">OTHER INFORMATION.</a></font></p>
    </div></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;</font></td>
    <td ALIGN="RIGHT"><font size="2">5</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap><font size="2">&nbsp;&nbsp;&nbsp;</font></td>
  </tr>
  <tr>
    <td ALIGN="LEFT" WIDTH="12%"><font size="2">ITEM 6.</font></td>
    <td WIDTH="3%"></td>
    <td WIDTH="3%"></td>
    <td WIDTH="3%"></td>
    <td ALIGN="LEFT" WIDTH="75%"><font size="2">&nbsp; <a
    href="#ITEM 6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K">EXHIBITS AND REPORTS ON FORM 8-K.</a></font></td>
    <td WIDTH="5%" ALIGN="RIGHT" nowrap></td>
    <td ALIGN="RIGHT"><font size="2">5</font></td>
    <td WIDTH="5%" ALIGN="LEFT" nowrap></td>
  </tr>
</table>
<b><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="3">

<hr SIZE="1" NOSHADE COLOR="#000000">
</font></b>

<hr NOSHADE SIZE="5">

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p ALIGN="CENTER"><font size="2"><b>PART I - FINANCIAL INFORMATION</b></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 1.&nbsp;FINANCIAL STATEMENTS">ITEM
1.&nbsp;FINANCIAL STATEMENTS</a><b> </b></font><a href="#TABLE OF CONTENTS"><font size="1">Back
to Table of Contents</font></a></p>

<p ALIGN="JUSTIFY"><font size="2">The Registrant's unaudited interim financial statements
are attached hereto. <a
href="#Financial Statements for the Interim Periods ended June 30, 2003 and 2002">Unaudited
Interim Financial Statements</a></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a
name="ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION">ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION</a> </font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">Some of the statements contained in this quarterly
report of Sheffield Pharmaceutical, Inc., a Delaware corporation (hereinafter </font><font
size="2" color="#000000">referred to as &quot;we&quot;, &quot;us&quot;, &quot;our&quot;,
&quot;Company&quot; and the &quot;Registrant</font><font size="2">&quot;) discuss future
expectations, contain projections of our plan of operation or financial condition or state
other forward-looking information. Forward-looking statements give our current
expectations or forecasts of future events. You can identify these statements by the fact
that they do not relate strictly to historical or current facts. They use of words such as
&quot;anticipate,&quot; &quot;estimate,&quot; &quot;expect,&quot; &quot;project,&quot;
&quot;intend,&quot; &quot;plan,&quot; &quot;believe,&quot; and other words and terms of
similar meaning in connection with any discussion of future operating or financial
performance. From time to time, we also may provide forward-looking statements in other
materials we release to the public.</font></p>

<p align="justify"><font size="2" color="#000000"><u>General Background of the Registrant</u></font></p>

<p align="justify" style="text-align: justify"><font size="2">Sheffield Pharmaceutical,
Inc.<font color="#000000">, a Delaware corporation, </font>was incorporated under Canadian
law in October 1986. In May 1992, the Registrant was domesticated to Wyoming pursuant to a
continuance procedure under Wyoming law. In January 1995, the Registrant's shareholders
approved the proposal to reincorporate the Registrant in Delaware, which reincorporation
was effected on June 13, 1995. </font></p>

<p align="justify" style="text-align: justify"><font size="2">Prior to filing for
bankruptcy in June 2003, the Registrant was a development stage company and, as such, had
been principally engaged in research, development and licensing efforts. The Company
generated minimal operating revenue, sustained significant net operating losses, and
required additional capital that the Company obtained through out-licensing of rights to
its technology, as well as through equity and debt offerings. The Registrant provided
pharmaceutical therapies by combining pulmonary drug delivery technologies with existing
and emerging therapeutic agents and had developed a range of products to treat respiratory
and systemic diseases. Sheffield believed these pulmonary delivery technologies would
allow it to capitalize on the growing drug delivery market by providing both advanced
respiratory treatments and patient-friendly alternatives for therapies that could have
been administered only by injection or other inconvenient means.</font></p>

<p style="text-align: justify"><font size="2">By mid 2003, the Registrant had failed to
reach profitability and was undercapitalized to implement its business plan. The Company's
inability to meet its obligations as they became due and to continue to operate its
business as a going concern resulted in the Company&#146;s decision to seek relief under
Chapter 7 of the Bankruptcy Code. </font></p>

<p align="justify"><font size="2">On June 6, 2003, the Registrant filed a voluntary
Chapter 7 bankruptcy petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
Western District of New York (case no. 03-22303). </font><font face="Times New Roman"
size="2">As a result of the Chapter 7 bankruptcy petition, the Registrant's assets were
transferred to a United States Trustee and the Registrant terminated its business
operations.</font><font size="2"> </font><font face="Times New Roman" size="2">During 2003
and 2004, the Bankruptcy Trustee had disposed of substantially all of the assets of the
Registrant and its subsidiaries. </font><font size="2">On June 7, 2005, the Trustee in
proceedings under Chapter 7, filed a notice of motion for the sale of the Company's
corporate entity and 70,000,000 restricted shares of the Registrant's unissued common
stock. On July 6, 2005, the Bankruptcy Court approved an order authorizing a change in
control and confirming that Glenin Bay Equity, LLC is a good faith purchaser pursuant to
11 USC Section 363(m). The Court order further provided that the Company, subsequent to
the bankruptcy proceeding, is free and clear of all liens, claims and interests of others
and that the sale was free and clear of any and all other real or personal property
interests, including any interests in the former subsidiaries of Sheffield.</font></p>

<p align="justify"><font size="2"><u>Change in Control following Bankruptcy</u></font></p>

<p style="text-align: justify"><font size="2">The material terms of the transaction
confirmed by the Bankruptcy Court authorized Glenin Bay Equity, LLC. to receive 70,000,000
restricted shares of common stock and to appoint new members to the Registrant's board of
directors. On July 8, 2005, Glenin Bay Equity, LLC. appointed </font><font size="2"
color="#000000">Michael F. Manion to the board of directors of the Registrant, which board
subsequently appointed Mr. Manion to be chief executive officer and chief financial
officer of the Registrant (the &quot;Management&quot;).</font></p>

<p><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2"><u>New Business
Objectives of the Registrant</u></font></p>

<p align="justify"><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2">As
a result of the Chapter 7 bankruptcy proceeding, the Registrant has no present operations.
Management determined to direct its efforts and limited resources to pursue potential new
business opportunities. The Registrant does not intend to limit itself to a particular
industry and has not established any particular criteria upon which it shall consider and
proceed with a business opportunity.</font></p>

<p align="justify"><font size="2">Our common stock previously traded on the American Stock
Exchange and subsequently on the NASDAQ OTCBB under the symbol SFFP. In 2003, due to the
Registrant's failure to file periodic and annual reports, the Registrant's shares were
deleted from the NASDAQ OTCBB market, following which the Registrant's common stock has
been subject to quotation on the pink sheets. There is currently only a limited trading
market in the Registrant's shares. There can be no assurance that there will be an active
trading market for our common stock. In the event that an active trading market commences,
there can be no assurance as to the market price of our shares of common stock, whether
any trading market will provide liquidity to investors, or whether any trading market will
be sustained.</font></p>

<p align="justify"><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2">Management
intends to devote such time as it deems necessary to carry out the Registrant's affairs.
The exact length of time required for the pursuit of any new potential business
opportunities is uncertain. No assurance can be made that we will be successful in our
efforts. We cannot project the amount of time that our Management will actually devote to
the Registrant's plan of operation.</font></p>

<p ALIGN="JUSTIFY"><font size="2" color="#000000"><u>Plan of Operation</u></font></p>

<p align="justify"><font size="2" color="#000000">We have no present operations or
revenues and our current activities are related to seeking new business opportunities,
including seeking an acquisition or merger with an operating company. If our board of
directors seeks to acquire another business or pursue a new business opportunity,
Management would have substantial flexibility in identifying and selecting a prospective
business. Registrant would not be obligated nor does Management intend to seek
pre-approval from our shareholders. Under the laws of the State of Delaware, the consent
of holders of a majority of the issued and outstanding shares, acting without a
shareholders meeting, can approve an acquisition.</font></p>

<p align="justify"><font size="2" color="#000000">The Registrant is entirely dependent on
the judgment of Management in connection with pursuing a new business opportunity or a
selection process for a target operating company. In evaluating a prospective new business
opportunity or an operating company, we would consider, among other factors, the
following: (i) costs associated with effecting a transaction; (ii) equity interest in and
opportunity to control the prospective candidate; (iii) growth potential of the target
business; (iv) experience and skill of management and availability of additional
personnel; (v) necessary capital requirements; (vi) the prospective candidate's
competitive position; (vii) stage of development of the business opportunity; (viii) the
market acceptance of the business, its products or services; (ix) the availability of
audited financial statements of the potential business opportunity; and (x) the regulatory
environment that may be applicable to any prospective business opportunity. </font></p>

<p align="justify"><font size="2" color="#000000">The foregoing criteria are not intended
to be exhaustive and there may be other criteria that Management may deem relevant. In
connection with an evaluation of a prospective or potential business opportunity,
Management may be expected to conduct a due diligence review.</font></p>

<p align="justify"><font size="2" color="#000000"><u>Liquidity and Capital Resources</u></font></p>

<p align="justify"><font size="2" color="#000000">We will use our limited personnel and
financial resources in connection with seeking new business opportunities, including
seeking an acquisition or merger with an operating company. It may be expected that
entering into a new business opportunity or business combination will involve the issuance
of a substantial number of restricted shares of common stock. If such additional
restricted shares of common stock are issued, our shareholders will experience a dilution
in their ownership interest in the Registrant. If a substantial number of restricted
shares are issued in connection with a business combination, a change in control may be
expected to occur.</font></p>

<p align="justify"><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2">In
connection with our plan to seek new business opportunities and/or effecting a business
combination, we may determine to seek to raise funds from the sale of restricted stock or
debt securities.We have no agreements to issue any debt or equity securities and cannot
predict whether equity or debt financing will become available at terms acceptable to us,
if at all.</font></p>

<p align="justify"><font color="#000000" face="TIMES NEW ROMAN, TIMES, SERIF" size="2">There
are no limitations in our articles of incorporation on our ability to borrow funds or
raise funds through the issuance of restricted common stock to effect a business
combination. Our limited resources and lack of operating history may make it difficult to
do borrow funds or raise capital. Our inability to borrow funds or raise funds through the
issuance of restricted common stock required to effect or facilitate a business
combination may have a material adverse effect on our financial condition and future
prospects, including the ability to complete a business combination. To the extent that
debt financing ultimately proves to be available, any borrowing will subject us to various
risks traditionally associated with indebtedness, including the risks of interest rate
fluctuations and insufficiency of cash flow to pay principal and interest, including debt
of an acquired business.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 3. CONTROLS AND PROCEDURES">ITEM 3.
CONTROLS AND PROCEDURES</a><b> </b></font><a href="#TABLE OF CONTENTS"><font size="1">Back
to Table of Contents</font></a></p>

<p style="text-align: justify"><font size="2">Evaluation of disclosure controls and
procedures. <font color="#000000">Management was appointed during the third quarter of
2005. As of July 13, 2005, the Company's chief executive officer and chief financial
officer conducted an evaluation regarding the effectiveness of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the&nbsp;
Exchange Act. Based upon the evaluation of these controls and procedures, our president
and chief financial officer concluded that our disclosure controls and procedures were
effective as of the date of filing this quarterly report.</font></font></p>

<p style="text-align: justify"><font size="2">Changes in internal controls. <font
color="#000000">During the period since management changed on July 8, 2005, no changes
occurred in our internal control over financial reporting that materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.</font></font></p>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p ALIGN="center"><font size="2"><b>PART II - OTHER INFORMATION</b></font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 1. LEGAL PROCEEDINGS">ITEM 1. LEGAL
PROCEEDINGS</a><b> </b></font><a href="#TABLE OF CONTENTS"><font size="1">Back to Table of
Contents</font></a></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 2. CHANGES IN SECURITIES">ITEM 2. CHANGES
IN SECURITIES</a> </font><font size="1"><a href="#TABLE OF CONTENTS">Back to Table of
Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 3.&nbsp;DEFAULTS UPON SENIOR SECURITIES">ITEM
3.&nbsp;DEFAULTS UPON SENIOR SECURITIES</a><b> </b></font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a
name="ITEM 4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS">ITEM
4.&nbsp;SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</a> </font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 5.&nbsp;OTHER INFORMATION">ITEM
5.&nbsp;OTHER INFORMATION</a><b> </b></font><font size="1"><a href="#TABLE OF CONTENTS">Back
to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">None.</font></p>

<p ALIGN="JUSTIFY"><font size="2"><a name="ITEM 6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K">ITEM
6.&nbsp;EXHIBITS AND REPORTS ON FORM 8-K</a><b> </b></font><font size="1"><a
href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<p ALIGN="JUSTIFY"><font size="2">(a) The following documents are filed as exhibits to
this report on Form 10-QSB or incorporated by reference herein. Any document incorporated
by reference is identified by a parenthetical reference to the SEC filing that included
such document.</font></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%" height="0%">
  <tr VALIGN="BOTTOM">
    <th nowrap height="0" bgcolor="#00FFFF" width="8%"><p align="left"><font size="1">Exhibit
    No.</font></th>
    <th nowrap ALIGN="LEFT" height="0" bgcolor="#00FFFF" width="92%"><font size="1">Description</font></th>
  </tr>
  <tr>
    <td width="8%" bgcolor="#FFFFFF" height="0%"><font size="1">31.1</font></td>
    <td width="92%" bgcolor="#FFFFFF" height="0%"><font size="1">Certification of Chief
    Executive Officer and Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of
    the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></td>
  </tr>
  <tr>
    <td width="8%" bgcolor="#FFFFFF" height="0%"><font size="1">32.1</font></td>
    <td width="92%" bgcolor="#FFFFFF" height="0%"><font size="1">Certification of Chief
    Executive Officer and Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></td>
  </tr>
</table>

<p><font size="2">(b)&nbsp;Reports on Form 8-K during the quarter covered by this report:</font></p>

<p><font size="2">The Registrant filed a Form 8-K on May 14, 2003 with disclosure under
Item 9. Regulation FD Disclosure, and on June 9, 2003 with disclosure under Item 3.
Bankruptcy or Receivership.</font></p>

<p align="center"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">SIGNATURES</font></p>

<p ALIGN="JUSTIFY"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date
indicated.</font></p>

<table ALIGN="CENTER" CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
  <tr>
    <td ALIGN="LEFT" WIDTH="56%"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><i>&nbsp;
    </i></font></td>
  </tr>
  <tr>
    <td ALIGN="LEFT" WIDTH="56%"><font FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><u>/s/
    Michael F. Manion</u><br>
    Michael F. Manion<br>
    &nbsp;&nbsp; <em>CEO, CFO and Chairman</em><br>
    <i>&nbsp;&nbsp; Dated: July 15, 2005</i></font></td>
  </tr>
</table>
</div>

<p><br clear="all" style="page-break-before:always; mso-break-type:section-break">
</p>
<div>

<p align="center"><a
name="Financial Statements for the Interim Periods ended June 30, 2003 and 2002"><strong><font
size="2">Financial Statements for the Interim Periods ended June 30, 2003 and 2002</font></strong></a><font
size="1"> <a href="#TABLE OF CONTENTS">Back to Table of Contents</a></font></p>

<table style="BORDER-BOTTOM: rgb(0,0,0) 1px" height="0%" cellSpacing="0" cellPadding="0"
width="100%" border="0">
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center" bgcolor="#00FFFF"><font
    size="2"><b>Sheffield Pharmaceuticals, Inc.</b></font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center"><a
    name="Balance Sheets"><font size="2">Balance Sheets</font></a></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" colspan="5" align="center"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1">Successor Company</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1">Predecessor
    Company</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1">June 30, 2003</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="1">December 31, 2002</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="1">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="1">(Unaudited)</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="1">&nbsp; </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><p align="center"><font size="2">ASSETS</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Current Assets:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Cash</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">327,195</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Inventory</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">349,422</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; Prepaid expenses</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"
    style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">158,697</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total current assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 2px none rgb(0,0,0)"></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">835,314</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Assets from discontinued
    operations held for sale:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp; Equipment,
    net</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">224,271</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Other assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">455,073</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Total Assets</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 2px double rgb(0,0,0)" bgcolor="#00FFFF"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 2px double rgb(0,0,0)" bgcolor="#00FFFF"><font size="2">1,514,658</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><p align="center"><font size="2">LIABILITIES
    AND STOCKHOLDERS' DEFICIENCY</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Current Liabilities:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Accounts
    payable-trade</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"><font size="2">$</font></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">2,598,678</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Accrued expenses</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">449,251</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Notes payable</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">1,975,000</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td vAlign="middle" align="right" width="13%" height="0%" bgcolor="#00FFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">5,022,929</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Long term debt</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">11,877,713</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%">&nbsp; </td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">Stockholders' Deficiency:</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Preferred Stock,
    3,000,000 authorized, $0.01 par value;</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">0</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">390</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Common stock,
    $0.01 par value; 100,000,000 shares authorized;</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
    29,563,712 issued and outstanding</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">295,637</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">295,637</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Additional paid-in
    capital</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">(295,637)</font></td>
    <td vAlign="middle" align="right" width="2%" height="0%"></td>
    <td vAlign="middle" align="right" width="13%" height="0%"><font size="2">87,756,118</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp; Accumulated
    deficit</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">0</font></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(103,438,129)</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Total
    Stockholders' Deficiency</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">0</font></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"><font size="2">(15,385,984)</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%"><font size="2">&nbsp; </font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"></td>
    <td style="border-bottom: 1px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%"></td>
    <td style="border-bottom: 1px solid rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%"></td>
  </tr>
  <tr>
    <td vAlign="middle" width="70%" height="0%" bgcolor="#00FFFF"><p align="left"><font
    size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities and Stockholders' Equity</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" vAlign="middle" align="right" width="2%"
    height="0%" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%" bgcolor="#00FFFF"><font size="2">0</font></td>
    <td style="border-bottom: 2px none rgb(0,0,0)" vAlign="middle" align="right" width="2%"
    height="0%" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" vAlign="middle" align="right" width="13%"
    height="0%" bgcolor="#00FFFF"><font size="2">1,514,658</font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" bgcolor="#FFFFFF" colspan="5"><font size="2">&nbsp;
    </font></td>
  </tr>
  <tr>
    <td vAlign="middle" width="100%" height="0%" bgcolor="#FFFFFF" colspan="5"><font size="2">See
    Notes to Unaudited Interim Financial Statements.</font></td>
  </tr>
</table>
</div>

<p><br style="PAGE-BREAK-BEFORE: always; mso-break-type: section-break" clear="all">
</p>
<div>

<table height="548" cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr>
    <td width="100%" height="0" colspan="9" align="center" bgcolor="#00FFFF"><font size="2"><b>Sheffield
    Pharmaceuticals, Inc.</b></font></td>
  </tr>
  <tr>
    <td width="100%" height="0" colspan="9" align="center"><a name="Statement of Operations"><font
    size="2">Statement of Operations</font></a></td>
  </tr>
  <tr>
    <td width="100%" height="0" colspan="9" align="center"></td>
  </tr>
  <tr>
    <td width="52%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="28%" height="0" colspan="3"><p align="center"><font size="1">Three
    Months Ended June 30,</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="28%" height="0" colspan="3"><p align="center"><font size="1">Six
    Months Ended June 30,</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="28%" height="0" colspan="3"><p align="center"><font size="1">(Unaudited)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="28%" height="0" colspan="3"><p align="center"><font size="1">(Unaudited)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">Successor Company</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">Predecessor Company</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">Successor Company</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">Predecessor Company</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">2003</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">2002</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">2003</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">2002</font></td>
  </tr>
  <tr>
    <td width="52%" height="0" bgcolor="#00FFFF"><font size="2">Revenue</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"><font size="2">10,000</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"><font size="2">10,000</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Costs and Expenses:</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; Research and development</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">1,622,136</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">2,775,926</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; General and administrative</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">1,442,734</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">3,381,400</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; Minority interest in loss</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(54,544)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(160,586)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Interest</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">176,570</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"
    bgcolor="#FFFFFF"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 1px none rgb(0,0,0)"
    bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"
    bgcolor="#FFFFFF"><font size="2">323,739</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Total costs and expenses</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">3,186,896</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">6,320,479</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Loss from continuing operations before
    discontinued operations</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(3,176,896)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(6,310,479)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Discontinued operations:</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Loss from
    discontinued operations (net of taxes)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"><font size="2">(289,692)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"><font size="2">(1,170,555)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td align="right" width="10%" height="0" bgcolor="#FFFFFF"><font size="2">0</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; Gain on disposal of assets used in
    discontinued operations</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">16,532,874</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">16,532,874</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 1px none rgb(0,0,0)"></td>
    <td align="right" width="10%" height="0" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">0</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Income from discontinued operations</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">16,243,182</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">15,362,319</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0" bgcolor="#00FFFF"><font size="2">Net Income (loss)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">16,243,182</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" bgcolor="#00FFFF"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">(3,176,896)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"
    bgcolor="#00FFFF"><font size="2">15,362,319</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 2px none rgb(0,0,0)"
    bgcolor="#00FFFF"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"
    bgcolor="#00FFFF"><font size="2">(6,310,479)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Preferred stock dividends</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">0</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(588,914)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(611,033)</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"><font size="2">(1,141,576)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Net income (loss) available to common
    shareholders</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">16,243,182</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">(3,765,810)</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">14,751,286</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">(7,452,055)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Basic and diluted per shares amounts:</font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; Continued operations</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">0.00</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">(0.13)</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">0.00</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0"><font size="2">(0.25)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp;&nbsp; Discontinued operations</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.55</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.00</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.50</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 2px none rgb(0,0,0)"><font
    size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.00</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Basic and diluted net loss</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.55</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.13)</font></td>
    <td align="right" width="2%" height="0"><font size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">0.50</font></td>
    <td align="right" width="2%" height="0" style="border-bottom: 2px none rgb(0,0,0)"><font
    size="2">$</font></td>
    <td align="right" width="10%" height="0" style="border-bottom: 2px double rgb(0,0,0)"><font
    size="2">(0.25)</font></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">&nbsp; </font></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="10%" height="0"></td>
  </tr>
  <tr>
    <td width="52%" height="0"><font size="2">Weighted average shares outstanding (basic and
    diluted)</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" align="right" width="2%" height="0"></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" align="right" width="10%" height="0"><font
    size="2">29,563,712</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" align="right" width="2%" height="0"></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" align="right" width="10%" height="0"><font
    size="2">29,541,954</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" align="right" width="2%" height="0"></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" align="right" width="10%" height="0"><font
    size="2">29,563,712</font></td>
    <td style="border-bottom: 2px none rgb(0,0,0)" align="right" width="2%" height="0"></td>
    <td style="border-bottom: 2px double rgb(0,0,0)" align="right" width="10%" height="0"><font
    size="2">29,284,410</font></td>
  </tr>
  <tr>
    <td width="130%" height="0" colspan="9"><font size="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="130%" height="0" colspan="9"><font size="2">See Notes to Unaudited Interim
    Financial Statements.</font></td>
  </tr>
</table>
</div>

<p><br style="PAGE-BREAK-BEFORE: always; mso-break-type: section-break" clear="all">
</p>
<div>

<table cellSpacing="0" cellPadding="0" width="100%" border="0" height="1">
  <tr>
    <td width="101%" height="0" colspan="5" align="center" bgcolor="#00FFFF"><font size="2"><b>Sheffield
    Pharmaceuticals, Inc.</b></font></td>
  </tr>
  <tr>
    <td width="101%" height="0" colspan="5" align="center"><a name="Statements of Cash Flows"><font
    size="2">Statements of Cash Flows</font></a></td>
  </tr>
  <tr>
    <td width="101%" height="0" colspan="5" align="center"></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="28%" align="right" height="0" colspan="3"><p align="center"><font size="1">Six
    Months Ended June 30,</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="28%" align="center" height="0" colspan="3"><font size="1">(Unaudited)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1">Successor Company</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" height="0"><font size="1">Predecessor Company</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="1">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" align="right" style="border-bottom: 1px solid rgb(0,0,0)" height="0"><font
    size="1">2003</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="1">2002</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td align="right" width="13%" height="0"></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash
    flows used by operating activities</font></td>
    <td width="2%" height="0" bgcolor="#00FFFF" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">(646,430)</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 1px" align="right" width="2%" height="0"
    bgcolor="#00FFFF"></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">(4,475,215)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Cash flow from investing activities:</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Purchase of
    equipment</font></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">(31,029)</font></td>
  </tr>
  <tr>
    <td width="70%" height="1" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Cash
    used in investing activities</font></td>
    <td width="2%" height="1" bgcolor="#00FFFF" align="right"></td>
    <td width="13%" height="1" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">0</font></td>
    <td align="right" width="2%" height="1" bgcolor="#00FFFF"></td>
    <td width="13%" height="1" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">(31,029)</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp;&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">Cash flows from financing activities:</font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="70%" height="1" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Proceeds from the
    issuance of common and preferred stock</font></td>
    <td width="2%" height="1" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="1" bgcolor="#FFFFFF" align="right"><font size="2">0</font></td>
    <td align="right" width="2%" height="1" bgcolor="#FFFFFF"></td>
    <td width="13%" height="1" bgcolor="#FFFFFF" align="right"><font size="2">2,007,000</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Proceeds from
    debt borrowings</font></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"><font size="2">330,000</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"><font size="2">2,500,000</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#FFFFFF"><font size="2">&nbsp;&nbsp; Payments on long
    term debt</font></td>
    <td width="2%" height="0" bgcolor="#FFFFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"><font size="2">(765)</font></td>
    <td align="right" width="2%" height="0" bgcolor="#FFFFFF"></td>
    <td width="13%" height="0" bgcolor="#FFFFFF" align="right"><font size="2">(4,134)</font></td>
  </tr>
  <tr>
    <td width="70%" height="1"><font size="2">&nbsp;&nbsp; Cash transferred to bankruptcy
    estate</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">(10,000)</font></td>
    <td align="right" width="2%" height="1"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">0</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#00FFFF"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Net
    cash provided by financing activities</font></td>
    <td width="2%" height="0" bgcolor="#00FFFF" align="right"></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">319,235</font></td>
    <td align="right" width="2%" height="0" bgcolor="#00FFFF"></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 1px solid rgb(0,0,0)"><font size="2">4,502,866</font></td>
  </tr>
  <tr>
    <td width="70%" height="0"><font size="2">&nbsp; </font></td>
    <td width="2%" height="0" align="right"></td>
    <td width="13%" height="0" align="right"></td>
    <td align="right" width="2%" height="0"></td>
    <td width="13%" height="0" align="right"></td>
  </tr>
  <tr>
    <td width="70%" height="1"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Change in cash</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right"><font size="2">(327,195)</font></td>
    <td align="right" width="2%" height="1"></td>
    <td width="13%" height="1" align="right"><font size="2">(3,378)</font></td>
  </tr>
  <tr>
    <td width="70%" height="1"><font size="2">Cash - beginning of period</font></td>
    <td width="2%" height="1" align="right"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">327,196</font></td>
    <td align="right" width="2%" height="1"></td>
    <td width="13%" height="1" align="right" style="border-bottom: 1px solid rgb(0,0,0)"><font
    size="2">859,298</font></td>
  </tr>
  <tr>
    <td width="70%" height="0" bgcolor="#00FFFF"><font size="2">Cash - end of period</font></td>
    <td width="2%" height="0" bgcolor="#00FFFF" align="right"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">0</font></td>
    <td style="BORDER-BOTTOM: rgb(0,0,0) 2px" align="right" width="2%" height="0"
    bgcolor="#00FFFF"><font size="2">$</font></td>
    <td width="13%" height="0" bgcolor="#00FFFF" align="right"
    style="border-bottom: 2px double rgb(0,0,0)"><font size="2">855,920</font></td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="5"><font size="2">&nbsp; </font></td>
  </tr>
  <tr>
    <td width="100%" height="0" bgcolor="#FFFFFF" colspan="5"><font size="2">See Notes to
    Unaudited Interim Financial Statements.</font></td>
  </tr>
</table>
</div>

<p><br style="PAGE-BREAK-BEFORE: always; mso-break-type: section-break" clear="all">
</p>
<div>

<p ALIGN="center"><font size="2"><b>SHEFFIELD PHARMACEUTICALS, INC..</b><br>
<a name="NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS">NOTES TO UNAUDITED INTERIM
FINANCIAL STATEMENTS<br>
</a></font></p>
<font size="2"><b>

<p ALIGN="JUSTIFY"></b><strong>1. Basis of Presentation</strong></font></p>
<font size="2">

<p ALIGN="JUSTIFY">Sheffield Pharmaceuticals, Inc. (the &quot;Company&quot;), was
incorporated in 1986 and changed its domicile to Delaware on June 13, 1995. Prior to
filing for bankruptcy under Chapter 7, Sheffield marketed a portfolio of products utilized
for treatment of pulmonary and respiratory diseases.</p>

<p ALIGN="JUSTIFY">The Financial Statements presented herein have been prepared by us in
accordance with the accounting policies described in our December 31, 2002 Annual Report
on Form 10-KSB and should be read in conjunction with the Notes to Consolidated Financial
Statements which appear in that report.</p>

<p ALIGN="JUSTIFY">The preparation of these financial statements in conformity with
accounting principles generally accepted in the United States requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. On an on going
basis, we evaluate our estimates, including those related intangible assets, income taxes,
insurance obligations and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed 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
resources. Actual results may differ from these estimates under different assumptions or
conditions.</p>

<p ALIGN="JUSTIFY">In the opinion of management, the information furnished in this Form
10-QSB reflects all adjustments necessary for a fair statement of the financial position
and results of operations and cash flows as of and for the three-month and six-month
periods ended June 30, 2003 and 2002. All such adjustments are of a normal recurring
nature. The Consolidated Financial Statements have been prepared in accordance with the
instructions to Form 10-QSB and therefore do not include some information and notes
necessary to conform with annual reporting requirements.</p>
<b>

<p ALIGN="JUSTIFY">&quot;Fresh Start&quot; Accounting: </b>On June 6, 2003 all assets were
transferred to the Chapter 7 trustee in settlement of all outstanding corporate
obligations. We adopted &quot;fresh-start&quot; accounting as of June 7, 2003 in
accordance with procedures specified by AICPA Statement of Position (&quot;SOP&quot;) No.
90-7, &quot;Financial Reporting by Entities in Reorganization under the Bankruptcy
Code.&quot;</p>

<p ALIGN="JUSTIFY">All results for periods subsequent to June 6, 2003 are referred to as
those of the &quot;Successor Company&quot;. The results of operations and cash flows as
presented on the 2003 financial statements reflect the predecessor company. The results of
the discontinued component have been reclassified from continuing operations to
discontinued operations. The reclassification reduced sales for the period ended June 30,
2003 by $75,000 and related expenses by $1,245,000. The successor company had no
transactions between June 6, 2003 and the end of the reporting period. </p>

<p ALIGN="JUSTIFY">In accordance with SOP No. 90-7, the reorganized value of the Company
was allocated to the Company's assets based on procedures specified by SFAS No. 141,
&quot;Business Combinations&quot;. Each liability existing at the plan sale date, other
than deferred taxes, was stated at the present value of the amounts to be paid at
appropriate market rates. It was determined that the Company's reorganization value
computed immediately before June 7, 2003 was $0. We adopted &quot;fresh-start&quot;
accounting because holders of existing voting shares immediately before filing and
confirmation of the sale received less than 50% of the voting shares of the emerging
entity and its reorganization value is less than its post-petition liabilities and allowed
claims. </p>

<p ALIGN="JUSTIFY">The accounts of the former subsidiaries were not included in the
bankruptcy sale and have not been carried forward.</p>
<b>

<p ALIGN="JUSTIFY">2. Bankruptcy Proceedings</b></p>

<p ALIGN="JUSTIFY">On June 6, 2003, the Registrant filed a voluntary Chapter 7 petition
under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Western District of New York
(case no. 03-22303). On July 6, 2005, the Bankruptcy Court approved an Order confirming
the sale of the public shell to Glenin Bay Equity, LLC. The transaction confirmed by the
Bankruptcy Court authorized Glenin Bay Equity, LLC. to receive 70,000,000 shares of common
stock or 70.3% of common shares outstanding. </font></p>

<p ALIGN="JUSTIFY"><font SIZE="2"><b>Resultant Change in Control:</b> In connection with the Order
confirming the sale of debtor's interest to Glenin Bay Equity, LLC. approved by the U.S.
Bankruptcy Court Western District of New York on July 6, 2005, the Court authorized a
change in control pursuant to which Michael F. Manion will become our new director. The
new board of directors appointed Michael F. Manion as chief executive officer and chief
financial officer on July 8, 2005. The Court order further provided that the sale was free
and clear of liens, claims and interests of others and that the sale was free and clear of
any and all other real or personal property interests, including any interests in
Sheffield&#146;s subsidiaries. The issuance of 70,000,000 shares of common stock along
with a change in our board has resulted in a change in control.</font></p>


<p><font SIZE="2"><b>3. Earnings/Loss Per Share </b></font></p>

<p ALIGN="JUSTIFY"><font SIZE="2">Basic earnings per share is computed by dividing income
available to common shareholders (the numerator) by the weighted-average number of common
shares outstanding (the denominator) for the period. Diluted earnings per share assume
that any dilutive convertible securities outstanding were converted, with related
preferred stock dividend requirements and outstanding common shares adjusted accordingly.
It also assumes that outstanding common shares were increased by shares issuable upon
exercise of those stock options for which market price exceeds the exercise price, less
shares which could have been purchased by us with the related proceeds. In periods of
losses, diluted loss per share is computed on the same basis as basic loss per share as
the inclusion of any other potential shares outstanding would be anti-dilutive.</font></p>


<p><font SIZE="2"><strong>4. New Accounting Standards</strong></font></p>

<p ALIGN="JUSTIFY"><font SIZE="2">Variable Interest Entities: In January 2003, the FASB issued
Interpretation No. 46, &quot;Consolidation of Variable Interest Entities, an
interpretation of ARB 51&quot; (&quot;FIN 46&quot;). The primary objectives of FIN 46 were
to provide guidance on the identification of entities for which control is achieved
through means other than through voting rights and how to determine when and which
business enterprise should consolidate the variable interest entity (&quot;VIE&quot;). We
adopted FIN 46 on July 1, 2003. The implementation of FIN 46 did not have an impact on the
earnings or financial position of the Company. </font></p>

<p ALIGN="JUSTIFY"><font SIZE="2">In June 2002, the FASB issued SFAS No. 146, &quot;Accounting for Costs
Associated with Exit or Disposal Activities.&quot; SFAS No.146 addresses financial
accounting and reporting for costs associated with exit or disposal activities and
nullifies EITF Issue No. 94-3, &quot;Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in a Restructuring).&quot; The principal difference between SFAS No.146 and EITF 94-3
relates to the recognition of a liability for a cost associated with an exit or disposal
activity. SFAS No. 146 requires that a liability be recognized for those costs only when
the liability is incurred. A commitment to an exit or disposal plan no longer will be a
sufficient basis for recording a liability for those activities. The provisions of SFAS
No. 146 are effective for exit or disposal activities initiated after December 31, 2002.
Accordingly, the Company adopted the provisions of SFAS No. 146 effective January 1, 2003.
The implementation of SFAS No. 146 did not have a material impact on the earnings or
financial position of the Company.</font></p>

<p style="text-align: justify"><font SIZE="2">In November 2002, the FASB issued Interpretation No. 45,
&quot;Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others&quot; (&quot;FIN 45&quot;). FIN 45 requires
the guarantor to recognize a liability for the non-contingent component of a guarantee;
that is, the obligation to stand ready to perform in the event that specified triggering
events or conditions occur. The initial measurement of this liability is the fair value of
the guarantee at its inception. The recognition of the liability is required even if it is
not probable that payments will be required under the guarantee or if the guarantee was
issued with a premium payment or as part of a transaction with multiple elements. FIN 45
also requires additional disclosures related to guarantees. The recognition measurement
provisions of FIN45 are effective for all guarantees entered into or modified after
December 31, 2002. FIN 45 also requires additional disclosures related to guarantees in
interim and annual financial statements. Accordingly, we adopted the provisions of FIN 45,
effective January 1,2003. The implementation of FIN 45 did not have an impact on our
earnings or financial position.</font></p>
</div>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>exh31_1.htm
<TEXT>
<html>

<head>
<title>Exhibit 31.1</title>
</head>

<body>

<p><font size="2">Exhibit 31.1</font></p>

<p align="center"><font size="2">CERTIFICATION</font></p>

<p><font size="2">I, Michael F. Manion, certify that:<br>
</font></p>

<blockquote>
  <p><font size="2">(1) I have reviewed this Quarterly Report of Sheffield Pharmaceuticals,
  Inc.; </font></p>
  <p><font size="2">(2) Based on my knowledge, this report does not contain any untrue
  statement of a material fact or omit to state a material fact necessary to make the
  statements made, in light of the circumstances under which such statements were made, not
  misleading with respect to the period covered by this report; </font></p>
  <p><font size="2">(3) Based on my knowledge, the financial statements, and other financial
  information included in this report, fairly present in all material respects the financial
  condition, results of operations and cash flows of the small business issuer as of, and
  for, the periods presented in this report; </font></p>
  <p><font size="2">(4) I am responsible for establishing and maintaining disclosure
  controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
  internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
  15d-15(f)) for the small business issuer and have: </font></p>
  <blockquote>
    <p><font size="2">(a) Designed such disclosure controls and procedures, or caused such
    disclosure controls and procedures to be designed under our supervision, to ensure that
    material information relating to the small business issuer, including its consolidated
    subsidiaries, is made known to us by others within those entities, particularly during the
    period in which this report is being prepared; </font></p>
    <p><font size="2">(b) Designed such internal control over financial reporting, or caused
    such internal control over financial reporting to be designed under our supervision, to
    provide reasonable assurance regarding the reliability of financial reporting and the
    preparation of financial statements for external purposes in accordance with generally
    accepted accounting principles; </font></p>
    <p><font size="2">(c) Evaluated the effectiveness of the small business issuer's
    disclosure controls and procedures and presented in this report our conclusions about the
    effectiveness of the disclosure controls and procedures, as of the end of the period
    covered by this report based on such evaluation; and </font></p>
    <p><font size="2">(d) Disclosed in this report any change in the small business issuer's
    internal control over financial reporting that occurred during the small business issuer's
    most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case
    of an Quarterly report) that has materially affected, or is reasonably likely to
    materially affect, the small business issuer's internal control over financial reporting;
    and </font></p>
  </blockquote>
  <p><font size="2">(5) I have disclosed, based on our most recent evaluation of internal
  control over financial reporting, to the small business issuer's auditors and the audit
  committee of the small business issuer's board of directors (or persons performing the
  equivalent functions): </font></p>
  <blockquote>
    <p><font size="2">(a) All significant deficiencies and material weaknesses in the design
    or operation of internal control over financial reporting which are reasonably likely to
    adversely affect the small business issuer's ability to record, process, summarize and
    report financial information; and </font></p>
    <p><font size="2">(b) Any fraud, whether or not material, that involves management or
    other employees who have a significant role in the small business issuer's internal
    control over financial reporting. </font></p>
  </blockquote>
</blockquote>

<p><font size="2">Date: July 15, 2005 <br>
</font></p>

<p><font size="2"><u>/s/ Michael F. Manion<br>
</u>[Signature] <br>
CEO,CFO and Chairman<br>
[Title] </font></p>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>exh32_1.htm
<TEXT>
<html>

<head>
<title>Exhibit 32.1</title>
</head>

<body>

<p align="left"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">Exhibit 32.1</font></p>

<p align="center"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">CERTIFICATION
PURSUANT TO<br>
18 U.S.C. SECTION 1350,<br>
AS ADOPTED PURSUANT TO SECTION 906<br>
OF THE SARBANES-OXLEY ACT OF 2002</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">In
connection with the Quarterly Report of Sheffield Pharmaceuticals, Inc. (the
&#147;Company&#148;) on Form 10-QSB for the period ended June 30, 2003 (the
&#147;Report&#148;), as filed with the Securities and Exchange Commission on the date
hereof, I, Michael F. Manion, Chief Executive Officer and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">1. The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and</font></p>

<p style="text-align: justify"><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">2. The
information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.</font></p>

<p>&nbsp;</p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">/s/ Michael F. Manion</font></p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">Michael F. Manion<br>
Chief Executive Officer and Chief Financial Officer<br>
Dated: July 15, 2005</font></p>

<p><font face="TIMES NEW ROMAN, TIMES, SERIF" size="2">A signed original of this written
statement required by Section 906 has been provided to Sheffield Pharmaceuticals, Inc. and
will be retained by the Company and furnished to the Securities and Exchange Commission or
its staff upon request.</font></p>
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