EXHIBIT 10.6.4

PROTEIN POLYMER TECHNOLOGIES, INC.

8% PROMISSORY NOTE

DUE ____________, 200_

$ __________

________, 200_

THIS NOTE IS ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933 (THE "ACT") AND QUALIFICATION PROVISIONS OF APPLICABLE STATE SECURITIES LAWS. IT CAN NOT BE SOLD, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE UNITED STATES UNLESS REGISTERED PURSUANT TO THE ACT AND QUALIFIED UNDER APPLICABLE STATE LAW OR, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO MAKER, AN EXEMPTION THEREFROM IS AVAILABLE.

FOR VALUE RECEIVED, the undersigned, Protein Polymer Technologies, Inc., with an address at 11494 Sorrento Valley Road, San Diego, California 92121, ("Maker"), promises to pay to _____________, with an address at ____________ ("Payee"), on ___________, 200_, or sooner as otherwise provided herein (the "Maturity Date"), the principal amount of _______________ ($_________) Dollars in lawful money of the United States of America (the "Principal”) together with all accrued interest. This Note bears simple interest (the "Interest") at the annual rate of eight percent (8%), except as otherwise provided herein, until the Principal and all accrued Interest thereon (collectively the “Obligations”) shall be paid in full.

Interest.

Maker shall pay the Interest, in arrears, on the Maturity Date. Interest on the Note will accrue from the most recent date to which Interest has been paid or, if no Interest has been paid, from the date of delivery of the Note. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

2.	Method of Payment.

Maker will pay Principal and Interest in money of the United States that at the time of payment is legal tender for the payment of public and private debts. All payments shall be sent to Payee at its address first set forth above or such other address as Payee shall notify Maker pursuant to the provisions of Paragraph 10 (h) below. Anything to the contrary notwithstanding, Maker, at its option, may pay Principal and/or Interest in shares of its Common Stock at the rate of ______ ($______) _____ per share.

$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

3.	Covenants.

Maker covenants and agrees that from and after the date hereof and until the date of repayment in full of the Obligations it shall comply with the following conditions:

(i) Maintenance of Existence and Conduct of Business. Maker shall, and shall cause each of its subsidiaries, if any, to (A) do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and rights; and (B) continue to conduct its business so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

(ii) Books and Records. Maker shall, and shall cause each of its subsidiaries, if any, to keep adequate books and records of account with respect to its business activities.

(iii) Insurance. Maker shall, and shall cause each of its subsidiaries, if any, to maintain insurance policies insuring such risks as are customarily insured against by companies engaged in businesses similar to those operated by Maker or such subsidiaries, if any, as the case may be. All such policies are to be carried with reputable insurance carriers and shall be in such amounts as are customarily insured against by companies with similar assets and properties engaged in a similar business.

(iv) Compliance with Law. Maker shall, and shall cause each of its subsidiaries, if any, to comply in all material respects with all federal, state and local laws and regulations applicable to it or such subsidiaries, as the case may be, which, if breached, would have a material adverse effect on Maker's or such subsidiaries', as the case may be, business or financial condition.

(v) Compliance with Material Agreements, Licenses, Patents and Financial Obligations. All of the terms of Maker’s and/or its subsidiaries’, if any, and affiliates’, material agreements, licenses, including but limited to its patents, and financial obligations shall be complied with, and each of them shall be kept in full force and effect in accordance with their respective terms

4.	Reorganization of Maker.

If Maker is party to a merger, consolidation or a transaction in which it is not the surviving or continuing entity or transfers or leases all or substantially all of its assets, the person who is the surviving or continuing entity or is the transferee or lessee of such assets shall assume the terms of this Note and the Obligations.

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

5.	Representations, Warranties, Covenants and Acknowledgements of Maker.

Maker represents and warrants that: (i) it, and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power to carry on its business as now conducted and to own its properties and assets it now owns; (ii) it, and each of its subsidiaries, if any, is duly qualified or licensed to do business as a foreign corporation in good standing in the jurisdictions in which ownership of property or the conduct of its business requires such qualification except jurisdictions in which the failure to qualify to do business will have no material adverse effect on its business, prospects, operations, properties, assets or condition (financial or otherwise); (iii) it, and each of its subsidiaries, if any, and/or affiliates thereof, holds all material licenses and patents and otherwise complies with all material laws, rules and regulations required to permit it to own its property and conduct its business in the jurisdictions in which it owns its property and conducts its business; (iv) it has full power and authority to execute and deliver this Note, and that the execution and delivery of this Note will not result in the breach of or default under, with or without the giving of notice and/or the passage of time, any other agreement, financial instrument, arrangement or indenture to which it is a party or by which it may be bound, or the violation of any law, statute, rule, decree, judgment or regulation binding upon it; (v) it, and each of its subsidiaries, if any, is in material compliance with all of its financial obligations and all of its material agreements; (vi) there is no material action, suit, proceeding, or investigation pending or currently threatened against it or any of its subsidiaries, if any; and (vii) it has taken and will take all acts required, including but not limited to authorizing the signatory hereof on its behalf to execute this Note, so that upon the execution and delivery of this Note, it shall constitute the valid and legally binding obligation of Maker enforceable against Maker in accordance with the terms thereof.

6.	Defaults and Remedies.

(a) Events of Default. The occurrence or existence of any one or more of the following events or conditions (regardless of the reasons therefor) shall constitute an "Event of Default" hereunder:

(i) Maker shall fail to make any payment of Principal or Interest when due and payable or declared due and payable pursuant to the terms hereof;

(ii) Maker shall fail to perform any other obligation and/or covenant as required by this Note in accordance with the terms hereof and such failure to perform shall not have been cured within five (5) business days after Maker’s receipt of notice of such failure to perform;

(iii) Any representation or warranty made in this Note by Maker shall be untrue or incorrect in any material respect as of the date when made or deemed made;

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

(iv) Any money judgment, writ or warrant of attachment, or similar process not covered by insurance in excess of Fifty Thousand ($50,000) Dollars in the aggregate shall be entered or filed against Maker or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of ten (10) days;

(v) Maker shall make an assignment for the benefit of creditors or shall be unable to pay its debts as they become due;

(vi) Maker shall have received a written notice of default related to any material agreement to which it is a party and such act of default shall remain uncured after any applicable cure period;

(vii) A case or proceeding shall have been commenced against Maker or any of its subsidiaries, if any, (each a “Proceeding Company”) in a court having competent jurisdiction seeking a decree or order in respect of a Proceeding Company (A) under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other similar law; (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of a Proceeding Company, or any of its properties; or (C) ordering the winding-up or liquidation of the affairs of a Proceeding Company, and such case or proceeding shall remain unstayed or undismissed for a period of ten (10) consecutive days or such court shall enter a decree or order granting the relief sought in such case or proceeding; or

(viii) A Proceeding Company shall (A) file a petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other similar law; or (B) consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or the taking of possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of such Proceeding Company, or any of its properties.

(b) Remedies. Upon the occurrence of an Event of Default specified in Paragraph 6(a) above, all Obligations then remaining unpaid hereunder shall immediately become due and payable in full, plus interest on the unpaid portion of the Obligations at the highest rate permitted by applicable law, without notice to Maker and without presentment, demand, protest or notice of protest, all of which are hereby waived by Maker together with all reasonable costs and expenses of the collection and enforcement of this Note, including reasonable attorney's fees and expenses, all of which shall be added to the amount due under this Note. The rights, powers, privileges and remedies of Payee pursuant to the terms hereof are cumulative and not exclusive of any other rights, powers, privileges and remedies which Payee may have under this Note or any other instrument or agreement

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

7.	Acknowledgment of Payee's Investment Representations.

By accepting this Note, Payee acknowledges that this Note has been or will be registered under the Act or qualified under any state securities laws and that the transferability thereof is restricted by the registration provisions of the Act as well as such state laws. Based upon the representations and agreements being made by it herein, this Note is being issued to it pursuant to an exemption from such registration provided by Section 4(2) of the Act, and applicable state securities law qualification exemptions. Payee represents that it (i) is an “Accredited Investor” as that term is defined in Rule 501 (a) of Regulation D promulgated under the Act, and (ii) is acquiring this Note for its own account, for investment purposes only and not with a view to resale or other distribution thereof, nor with the intention of selling, transferring or otherwise disposing of all or any part of these securities for any particular event or circumstance, except selling, transferring or disposing of them only upon full compliance with all applicable provisions of the Act, the Securities Exchange Act of 1934, the Rules and Regulations promulgated by the Commission thereunder, and any applicable state securities laws. In addition, Payee understands and acknowledges that any routine sales of these securities made in reliance upon Rule 144 promulgated by the Commission under the Act can be effected only in the amounts set forth in and pursuant to the other terms and conditions, including applicable holding periods, of that Rule. Payee further understands and agrees that no transfer of this Note shall be valid unless made in compliance with the restrictions set forth on the front of this Note, effected on Maker's books by the registered holder hereof, in person or by an attorney duly authorized in writing, and similarly noted hereon as provided in Paragraph 10(k) below.

8.	Limitation of Interest Payments.

Nothing contained in this Note or in any other agreement between Maker and Payee requires Maker to pay or Payee to accept interest in an amount that would subject Payee to any penalty or forfeiture under applicable law. In no event shall the total of all charges payable hereunder, whether of interest or of such other charges, which may or might be characterized as interest, exceed the maximum rate permitted to be charged under the laws of the States of ______________________________________ or any other state or jurisdiction in which either Maker or Payee may be located or may conduct business. Should Payee receive any payment that is or would be in excess of that permitted to be charged under such laws, such payment shall have been and shall be deemed to have been made in error and shall automatically be applied to reduce the Principal outstanding on this Note.

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

9.	Maker’s Right to Prepay the Note.

Maker may prepay this Note without penalty.

10.	Miscellaneous.

(a) Effect of Forbearance. No forbearance, indulgence, delay or failure to exercise any right or remedy by Payee with respect to this Note shall operate as a waiver or as an acquiescence in any default.

(b) Effect of Single or Partial Exercise of Right. No single or partial exercise of any right or remedy by Payee shall preclude any other or further exercise thereof or any exercise of any other right or remedy by Payee.

(c) Gender. The use herein of the masculine pronouns or similar terms shall be deemed to include the feminine and neuter genders as well and the use of the singular pronouns shall be deemed to include the plural as well.

(d) Governing Law; Waiver of Right to Jury Trial; Venue. Maker hereby agrees that this Note shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the internal laws of the _________________ applicable to contracts made and to be performed entirely within such jurisdiction. Maker hereby waives all right to trial by jury in any action, suit or proceeding brought to enforce or defend any rights or remedies under this Note, and agrees that any lawsuit brought to enforce or interpret the provisions of this Note shall be instituted in the federal courts in __________, and Maker further agrees to submit to the personal jurisdiction of such court and waives any objection which it may have, based on improper venue, forum non conveniens or sufficiency of contact with the forum state, to the conduct of any proceeding in any such court and waives personal service of any and all process upon it, and consents that all such service of process be made by mail or messenger directed to it at the address set forth in Paragraph 10(h) below and that service so made shall be deemed to be completed upon the earlier of actual receipt or three (3) days after the same shall have been posted to its address. Nothing contained in this Paragraph 10(d) affects the right of Payee to serve legal process in any other manner permitted by law, select the internal laws of a jurisdiction other than the ________________ pursuant to which this Note shall be construed and enforced or bring any action or proceeding against Maker or its property in the courts of any other jurisdiction and Maker agrees to submit to the personal jurisdiction of such courts as aforesaid.

(e) Headings. The headings and captions of the various paragraphs herein are for convenience of reference only and shall in no way modify any of the terms or provisions of this Note.

(f) Loss, Theft, Destruction or Mutilation. Upon receipt by Maker of evidence reasonably satisfactory to it of loss, theft, destruction or mutilation of this Note, Maker shall make and deliver or caused to be made and delivered to Payee a new Note of like tenor in lieu of this Note.

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

(g) Modification of Note or Waiver of Terms Thereof Relating to Payee. No modification or waiver of any of the provisions of this Note shall be effective unless in writing and signed by Payee and then only to the extent set forth in such writing, or shall any such modification or waiver be applicable except in the specific instance for which it is given. This Note may not be discharged orally but only in writing duly executed by Payee.

(h) Notice. All offers, acceptances, notices, requests, demands and other communications under this Note shall be in writing and, except as otherwise provided herein, shall be deemed to have been given only when delivered in person, via facsimile transmission if receipt thereof is confirmed by the recipient, or, if mailed, when mailed by certified or registered mail prepaid, to the parties at their respective addresses first set forth above, or at such other address as may be given in writing in future by either party to the other.

(i) Successors and Assigns. This Note shall be binding upon Maker, its successors, assigns and transferees, and shall inure to the benefit of and be enforceable by Payee and his successors and assigns.

(j) Severability. If one or more of the provisions or portions of this Note shall be deemed by any court or quasi-judicial authority to be invalid, illegal or unenforceable in any respect, the invalidity, illegality or unenforceability of the remaining provisions, or portions of provisions contained herein shall not in any way be affected or impaired thereby.

(k) Transfer. This Note shall be transferable only on the books of Maker upon delivery thereof duly endorsed by Payee or by its duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment, or authority to transfer. In all cases of transfer by an attorney, executor, administrator, guardian, or other legal representative, duly authenticated evidence of his authority shall be produced. Upon any registration of transfer, Maker shall deliver a new Note or Notes to the person entitled thereto. Notwithstanding the foregoing, Maker shall have no obligation to cause Notes to be transferred on its books to any person if, in the opinion of counsel to Maker, such transfer does not comply with the provisions of the Act and the rules and regulations thereunder.

(signature page to follow)

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$___________ Secured Promissory Note

of Protein Polymer Technologies, Inc.

payable to _________.

dated _______, 200_

IN WITNESS WHEREOF, Maker has caused this Note to be executed on its behalf by an officer thereunto duly authorized as of the date first set forth above.

	Protein Polymer Technologies, Inc.,
	a Delaware corporation


	By:
		James B. McCarthy,
		Interim President and Chief
		Executive Officer

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EXHIBIT 10.6.5

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.

PROTEIN POLYMER TECHNOLOGIES, INC.

COMMON STOCK PURCHASE WARRANT

_____________, 200_

THIS COMMON STOCK PURCHASE WARRANT (this “Warrant”) of Protein Polymer Technologies, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company”), is issued to the Holder (as defined below).

FOR VALUE RECEIVED, the Company hereby certifies that the registered holder hereof and its successors and assigns, ___________ (the “Holder”) is entitled to purchase from the Company _______ duly authorized, validly issued, fully paid and nonassessable shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), at a purchase price per share equal to $_____, as may be adjusted to the anti-dilution provisions set forth herein (the “Warrant Price”). The person or entity in whose name this Warrant (or one or more predecessor Warrants) is registered on the records of the Company regarding registration and transfers of the Warrant (the “Warrant Register”) is the owner and holder thereof for all purposes, except as described in Section 11 hereof.

1. Vesting of Warrant. This Warrant shall vest and become exercisable as of the date hereof.

2. Expiration of Warrant. This Warrant shall expire on _________ (the “Expiration Date”).

3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the terms of Section 1 and this Section 3 hereof.

3.1 Manner of Exercise. This Warrant may only be exercised by the Holder hereof, in accordance with the terms and conditions hereof, in whole or in part with respect to any portion of the Warrant, into shares of Common Stock, during normal business hours on any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York, New York are authorized by law to be closed (a “Business Day”) on or prior to the Expiration Date with respect to such portion of the Warrant, by surrender of this Warrant to the Company at its office maintained pursuant to Section 11.2(a) hereof, accompanied by an exercise notice in substantially the form attached to this Warrant as Exhibit A (or a reasonable facsimile thereof) duly executed by the Holder, together with the payment of the Warrant Price.

3.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the Business Day on which this Warrant shall have been surrendered to the Company as provided in Section 3.1 hereof, and, at such time, the corporation, association, partnership, organization, business, individual, government or political subdivision thereof or a governmental agency (a “Person” or the “Persons”) in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon exercise as provided in Section 3.3 hereof shall be deemed to have become the holder or holders of record thereof.

3.3 Delivery of Stock Certificates. As soon as practicable after each exercise of this Warrant, in whole or in part, and in any event within fifteen (15) Business Days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof or, subject to Section 10 hereof, as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct:

(a) a certificate or certificates (with appropriate restrictive legends, as applicable) for the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock to which the Holder shall be entitled upon exercise plus, in lieu of any fractional share to which the Holder would otherwise be entitled, all issuances of Common Stock shall be rounded up to the nearest whole share.

(b) in case exercise is in part only, a new Warrant of like tenor, dated the date hereof and calling in the aggregate on the face thereof for the number of shares of Common Stock equal to the number of shares called for on the face of this Warrant minus the number of shares designated by the Holder upon exercise as provided in Section 3.1 hereof (without giving effect to any adjustment thereof).

3.4 Company to Reaffirm Obligations. The Company will, at the time of each exercise of this Warrant, upon the written request of the Holder hereof, acknowledge in writing its continuing obligation to afford to the Holder all rights (including without limitation any rights to registration of the shares of Common Stock issued upon exercise) to which the Holder shall continue to be entitled after exercise in accordance with the terms of this Warrant; provided, however, that if the Holder shall fail to make a request, the failure shall not affect the continuing obligation of the Company to afford the rights to such Holder.

4. Adjustment of Common Stock Issuable Upon Exercise. The Warrant Price shall be subject to be adjusted and re-adjusted from time to time as provided in this Section 4 and, as so adjusted or re-adjusted, shall remain in effect until a further adjustment or re-adjustment thereof is required by this Section 4:

4.1 Stock Dividends; Stock Splits. In case the Company at any time or from time to time after the date hereof shall declare or pay any dividend on the Common Stock payable in Common Stock, or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock), then, and in each case, subject to Section 4.3 hereof, the Warrant Price shall be reduced, concurrently with the dividend or subdivision, to a price determined by multiplying the Warrant Price by a fraction:

(a) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the dividend or subdivision; and

(b) the denominator of which shall be the number of shares of Common Stock outstanding immediately after the dividend or subdivision.

Additional shares of Common Stock shall be deemed to have been issued and to be outstanding (a) in the case of any dividend, immediately after the close of business on the record date for the determination of holders of any class of securities entitled to receive the dividend, or (b) in the case of any subdivision, at the close of business on the day immediately prior to the day upon which the corporate action becomes effective. Additional shares of Common Stock deemed to have been issued pursuant to this Section 4.1 shall be deemed to have been issued for no consideration.

4.2 Subscription Offerings. In case the Company shall issue to stockholders or otherwise rights, options, or warrants entitling the holders thereof to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or having a conversion price per share, in the case of a security convertible into or exchangeable for Common Stock) less than the lower of the then Exercise Price or the Current Market Price per share (as defined in Paragraph 4.4 below) on the record date for the determination of stockholders entitled to receive such rights, or otherwise on the granting date, as the case may be, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to such record or granting date, as the case may be, by a fraction, of which the numerator shall be the number of shares of Common Stock outstanding on such record or granting date plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Exercise Price or Current Market Price, as the case may be, and of which the denominator shall be the number of shares of Common Stock outstanding on such record or granting date plus the number of additional shares of Common Stock to be offered for subscription or purchase (or into which the convertible or exchangeable securities so to be offered are initially convertible or exchangeable). Such adjustment shall become effective at the close of business on such record date or granting date, as the case may be; provided, however, that, to the extent the shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) are not delivered, the Exercise Price shall be readjusted after the expiration of such rights, options, or warrants (but only to the extent that the Warrants are not exercised after such expiration), to the Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made upon the basis of delivery of only the number of shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) actually issued. In case any subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Company's Board of Directors. Shares of Common Stock owned by or held for the account of the Company or any majority-owned subsidiary shall not be deemed outstanding for the purpose of any such computation.

4.3 Other Rights to Acquire Common Stock. In case the Company shall distribute to all holders of its Common Stock evidences of its indebtedness or assets (excluding cash dividends or distributions paid from retained earnings of Maker) or rights or warrants to subscribe or purchase Common stock (excluding those referred to in Paragraph 4.2 above), then in each such case the Exercise Price shall be adjusted so that the same shall equal the price determined by multiplying the Exercise Price in effect immediately prior to the date of such distribution by a fraction of which the numerator shall be the Current Market Price per share (as defined in Paragraph 4.4 below) of the Common Stock on the Record Date mentioned below less the then fair market value (as determined in good faith by the Board of Directors of the Company) of the portion of the assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock, and the denominator shall be the Current Market Price per share of the Common Stock. Such adjustment shall become effective immediately after the Record Date for the determination of shareholders entitled to receive such distribution.

4.4 For the purpose of any computation under Paragraph 4.2 and 3 of this Section 4, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices for the 30 consecutive trading days commencing 45 trading days before such date. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the closing bid price regular way, in either case on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the highest reported bid price as furnished by the National Association of Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ is no longer reporting such information, or by the Pink Sheets, LLC or similar organization if the Common Stock is not then quoted on an inter-dealer quotation system. If on any such date the Common Stock is not quoted by any such organization, the fair value of the Common Stock on such date, as determined in good faith by the Company's Board of Directors, shall be used.

4.5 Adjustments for Combinations. In case the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Warrant Price in effect immediately prior to the combination or consolidation shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. Adjustment under this Section 4.5 shall become effective at the close of business on the day immediately prior to the day upon which the corporate action becomes effective.

4.6 Minimum Adjustment of Warrant Price. If the amount of any adjustment of the Warrant Price required pursuant to this Section 4 would be less than one percent (1%) of the Warrant Price in effect at the time of the adjustment is otherwise so required to be made, the amount shall be carried forward and adjustment with respect thereto made at the time of and together with any subsequent adjustment which, together with the amount and any other amount or amounts so carried forward, shall aggregate at least one percent (1%) of the Warrant Price.

5. Adjustments for Consolidation, Merger, Sale of Assets or Reorganization. In case the Company after the date hereof (a) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation following the consolidation or merger, or (b) shall permit any other Person to consolidate with or merge into the Company and the Company shall be the continuing or surviving Person but, in connection with the consolidation or merger, the Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (c) shall transfer all or substantially all of its properties or assets to any other Person, or (d) shall effect a capital reorganization or reclassification of the Common Stock, then, and in the case of each such transaction, proper provision shall be made so that, upon the basis and the terms and in the manner provided in this Warrant, the Holder, upon the exercise hereof at any time after the consummation of the transaction, shall be entitled to receive (at the aggregate Warrant Price in effect at the time of such consummation for all Common Stock issuable upon exercise immediately prior to the consummation), in lieu of the Common Stock issuable upon exercise prior to the consummation, the greatest amount of securities, cash or other property to which the Holder would actually have been entitled as a stockholder upon such consummation if the Holder had exercised the rights represented by this Warrant immediately prior thereto, subject to adjustments (subsequent to the consummation) as nearly equivalent as possible to the adjustments provided for in Sections 4 and 5 hereof.

6. No Dilution or Impairment.

6.1 The Company will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all of the terms and in the taking of all actions necessary or appropriate in order to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) will not permit the par value of any shares of Common Stock receivable upon the exercise of this Warrant to exceed the amount payable therefor upon exercise, (b) will take all actions necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on the exercise of the Warrant and (c) will not take any action which results in any adjustment of the Warrant Price if the total number of shares of Common Stock issuable after the action upon the exercise of the Warrant would exceed the total number of shares of Common Stock then authorized by the Company's certificate of incorporation and available for the purpose of issuance upon exercise.

6.2 The Company acknowledges that its obligation to issue shares of Common Stock issuable upon exercise of this Warrant is binding upon it and enforceable regardless of the dilution that such issuance may have on the ownership interests of other stockholders.

7. Chief Financial Officer’s Report as to Adjustments. In the case of any adjustment or re-adjustment in the shares of Common Stock issuable upon the exercise of this Warrant, the Company at its expense will promptly compute the adjustment or re-adjustment in accordance with the terms of this Warrant and cause its Chief Financial Officer to certify the computation (other than any computation of the fair value of property as determined in good faith by the Board of Directors of the Company) and prepare a report setting forth the adjustment or re-adjustment and showing in reasonable detail the method of calculation thereof and the facts upon which the adjustment or re-adjustment is based, including a statement of (a) the number of shares of Common Stock outstanding or deemed to be outstanding and (b) the Warrant Price in effect immediately prior to the deemed issuance or sale and as adjusted and re-adjusted (if required by Section 4 hereof) on account thereof. The Company will forthwith mail a copy of each report to each holder of a Warrant and will, upon the written request at any time of any holder of a Warrant, furnish to the holder a like report setting forth the Warrant Price at the time in effect and showing in reasonable detail how it was calculated. The Company will also keep copies of all reports at its office maintained pursuant to Section 11.2(a) hereof and will cause them to be available for inspection at the office during normal business hours upon reasonable notice by any holder of a Warrant or any prospective purchaser of a Warrant designated by the holder thereof.

8. Reservation of Shares. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, free from all taxes, liens and charges with respect to the issue thereof and not be subject to preemptive rights or other similar rights of stockholders of the Company, solely for the purpose of effecting the exercise of this Warrant, such number of its shares of Common Stock as shall from time to time be sufficient to effect the exercise thereof, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the exercise of this Warrant, in addition to such other remedies as shall be available to Holder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase the number of authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including without limitation, using its best efforts to obtain the requisite stockholder approval necessary to increase the number of authorized shares of the Company’s Common Stock. All shares of Common Stock issuable upon exercise of the Warrant shall be duly authorized and, when issued upon exercise, shall be validly issued and, in the case of shares, fully paid and nonassessable.

9. Listing. The Company shall at all times comply in all respects with the Company’s reporting, filing and other obligations under the by-laws or rules of the upon each national securities exchange or automated quotation system upon which shares of Common Stock are then listed and shall list the shares issuable upon the exercise of this Warrant on such national securities exchange.

10. Restrictions on Transfer.

10.1 Restrictive Legends. This Warrant and each Warrant issued upon transfer or in substitution for this Warrant pursuant to Section 11, each certificate for Common Stock issued upon the exercise of any Warrant and each certificate issued upon the transfer of any such Common Stock shall be transferable only upon satisfaction of the conditions specified in this Section 10. Each of the foregoing securities shall be stamped or otherwise imprinted with a legend reflecting the restrictions on transfer set forth in Section 10 hereof and any restrictions required under the Securities Act of 1933 (the “Act”).

10.2 Notice of Proposed Transfer; Opinion of Counsel. Prior to any transfer of any securities that are not registered under an effective registration statement under the Act (“Restricted Securities”), the Holder will give written notice to the Company of the Holder's intention to affect a transfer and to comply in all other respects with this Section 10.2. Each notice (a) shall describe the manner and circumstances of the proposed transfer, and (b) shall designate counsel for the Holder giving the notice (who may be in-house counsel for the Holder). The Holder giving notice will submit a copy thereof to the counsel designated in the notice. The following provisions shall then apply:

(i) If in the opinion of counsel for the Holder reasonably satisfactory to the Company the proposed transfer (i.e. private sale of Restricted Securities) may be effected without registration of Restricted Securities under the Act (which opinion shall state the basis of the legal conclusions reached therein), the Holder shall thereupon be entitled to transfer the Restricted Securities in accordance with the terms of the notice delivered by the Holder to the Company. Each certificate representing the Restricted Securities issued upon or in connection with any transfer shall bear the restrictive legends required by Section 10.1 hereof.

(ii) If the opinion called for in (i) above is not delivered, the Holder shall not be entitled to transfer the Restricted Securities until either (x) receipt by the Company of a further notice from such Holder pursuant to the foregoing provisions of this Section 10.2 and fulfillment of the provisions of clause (i) above, or (y) such Restricted Securities have been effectively registered under the Act.

10.3 Termination of Restrictions. The restrictions imposed by this Section 10 upon the transferability of Restricted Securities shall cease and terminate as to any particular Restricted Securities: (a) which Restricted Securities shall have been effectively registered under the Act, or (b) when, in the opinions of both counsel for the holder thereof and counsel for the Company, which opinion shall not be unreasonably withheld, such restrictions are no longer required in order to insure compliance with the Act or Section 10 hereof. Whenever such restrictions shall cease and terminate as to any Restricted Securities, the Holder thereof shall be entitled to receive from the Company, without expense (other than applicable transfer taxes, if any), new securities of like tenor not bearing the applicable legends required by Section 10.1 hereof.

11. Ownership, Transfer and Substitution of Warrant.

11.1 Ownership of Warrant. The Company may treat the person in whose name this Warrant is registered to in the Warrant Register maintained pursuant to Section 11.2(b) hereof as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, except that, if and when any Warrant is properly assigned by a notice in substantially the form attached to this Warrant as Exhibit C (or a reasonable facsimile thereof) duly executed by the Holder in blank, the Company shall treat the bearer thereof as the owner of such Warrant for all purposes, notwithstanding any notice to the contrary. Subject to Section 10 hereof, this Warrant, if properly assigned, may be exercised by a new holder without a new Warrant first having been issued.

11.2 Office; Transfer and Exchange of Warrant.

(a) The Company will maintain an office (which may be an agency maintained at a bank) at 11494 Sorrento Valley Road, San Diego, California 92121 (until the Company notifies the Holder of any change of location of the office) where notices, presentations and demands in respect of this Warrant may be made upon it.

(b) The Company shall cause to be kept at its office maintained pursuant to Section 11.2(a) hereof a Warrant Register for the registration and transfer of the Warrant. The names and addresses of holders of the Warrant, the transfers thereof and the names and addresses of transferees of the Warrant shall be registered in such Warrant Register. The Person in whose name any Warrant shall be so registered shall be deemed and treated as the owner and holder thereof for all purposes of this Warrant, and the Company shall not be affected by any notice or knowledge to the contrary.

(c) Upon the surrender of this Warrant, properly endorsed, for registration of transfer or for exchange at the office of the Company maintained pursuant to Section 11.2(a) hereof, the Company at its expense will (subject to compliance with Section 10 hereof, if applicable) execute and deliver to or upon the order of the Holder thereof a new Warrant of like tenor, in the name of such holder or as such holder (upon payment by such holder of any applicable transfer taxes) may direct, calling in the aggregate on the face thereof for the number of shares of Common Stock called for on the face of the Warrant so surrendered.

11.3 Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of the Warrant and, in the case of any such loss, theft or destruction of the Warrant, upon delivery of indemnity reasonably satisfactory to the Company in form and amount or, in the case of any mutilation, upon surrender of the Warrant for cancellation at the office of the Company maintained pursuant to Section 11.2(a) hereof, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor and dated the date hereof.

12. No Rights or Liabilities as Stockholder. Except as may otherwise be provided herein, no Holder shall be entitled to vote or receive dividends or be deemed the holder of any shares of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable, as provided herein. The Holder will not be entitled to share in the assets of the Company in the event of liquidation, dissolution or the winding up of the Company.

13. Notices. Any notice or other communication in connection with this Warrant shall be deemed to be given if in writing (or in the form of a facsimile) addressed as hereinafter provided and actually delivered at such address: (a) if to any Holder, at the registered address of such holder as set forth in the Warrant Register kept at the office of the Company maintained pursuant to Section 11.2(a) hereof, or (b) if to the Company, to the attention of its Chief Financial Officer at its office maintained pursuant to Section 11.2(a) hereof; provided, however, that the exercise of any Warrant shall be effective in the manner provided in Section 3 hereof.

14. Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the issuance of shares of Common Stock underlying this Warrant upon exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificate for shares of Common Stock underlying this Warrant in a name other that of the Holder. The Holder is responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving shares of Common Stock underlying this Warrant upon exercise hereof.

15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholders services business shall be successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

16. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of Delaware. The section headings in this Warrant are for purposes of convenience only and shall not constitute a part hereof.

IN WITNESS WHEREOF, the Company has caused this Common Stock Purchase Warrant to be duly executed as of the date first above written.

PROTEIN POLYMER TECHNOLOGIES, INC.

By:
	Name:	James B. McCarthy
	Title:	Interim President and Interim Chief Executive Officer

EXHIBIT A

FORM OF EXERCISE NOTICE

[To be executed only upon conversion of Warrant]

To PROTEIN POLYMER TECHNOLOGIES, INC.:

The undersigned registered holder of the within Warrant hereby irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with respect to __________(1) shares of the Common Stock, at an exercise price per share of Common Stock of $____, which the holder would be entitled to receive upon the cash exercise hereof, and requests that the certificates for the shares be issued in the name of, and delivered to, whose address is:

Dated: _______________

Print or Type Name

(Signature must conform in all respects to name of holder as specified on the face of Warrant)

(Street Address)

(City) (State) (Zip Code)

_______________________

(1) Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised), in either case without making any adjustment of shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered, representing the unconverted portion of the Warrant, to the holder surrendering the Warrant.

EXHIBIT B

FORM OF ASSIGNMENT

[To be executed only upon transfer of Warrant]

For value received, the undersigned registered holder of the within Warrant hereby sells, assigns and transfers unto _____________________ the right represented by the Warrant to purchase __________(1) shares of Common Stock of PROTEIN POLYMER TECHNOLOGIES, INC. to which the Warrant relates, and appoints _____________________ Attorney to make such transfer on the books of PROTEIN POLYMER TECHNOLOGIES, INC. maintained for the purpose, with full power of substitution in the premises.

Dated:

(Signature must conform in all respects

to name of holder as specified on the

face of Warrant)

(Street Address)

(City) (State) (Zip Code)

Signed in the presence of:

(Signature of Transferee)

(Street Address)

(City) (State) (Zip Code)

Signed in the presence of:

_______________________

(1) Insert here the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised), in either case without making any adjustment of shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. In the case of a partial exercise, a new Warrant or Warrants will be issued and delivered, representing the unexercised portion of the Warrant, to the holder surrendering the Warrant.

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Protein Polymer Technologies, Inc. (the "Company") for the quarterly period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JAMES B. MCCCARTHY

James B. McCarthy

Interim Chief Executive Officer

November 19, 2008

EXHIBIT 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JAMES B. MCCCARTHY

James B. McCarthy

Interim Principal Financial Officer

November 19, 2008

Delaware	33-0311631
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

			Page

PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007	3
		Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2008 and 2007 (unaudited)	4
		Condensed Statements of Cash Flows for the Six Months ended September 30, 2008 and 2007 (unaudited)	5
		Notes to Condensed Financial Statements (unaudited)	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
	Item 4T.	Controls and Procedures	21

PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	23
	Item 1A.	Risk Factors	23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 3.	Defaults Upon Senior Securities	23
	Item 4.	Submission of Matters to a Vote of Security Holders	23
	Item 5.	Other Information	23
	Item 6.	Exhibits	24

SIGNATURES			25

	Exhibit 10.6.4
	Exhibit 10.6.5
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32.1
	Exhibit 32.2

	September 30			December 31
	2008 (unaudited)			2007
Assets
Current assets:
Cash	$	1,560		$	21,936
Prepaid expenses and other current assets		59,011			33,419
Total current assets		60,571			55,355

Deposits		29,679			29,679
Equipment and leasehold improvements, net		28,311			128,100
Investment		520,000			520,000
Total assets	$	638,561		$	733,134

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	942,338		$	827,626
Accrued liabilities		746,314			794,312
Secured note payable - related party, net of unamortized debt discount		6,414,837			5,876,000
Current maturities of notes payable		519,071			419,071
Total current liabilities		8,622,560			7,917,009

Notes payable, net of current maturities		—			100,000
Total liabilities		8,622,560			8,017,009
Commitments and contingencies (Note 9)

Stockholders' deficit:
Convertible preferred stock, $0.01 par value; 5,000,000 shares authorized; 65,646 shares issued and outstanding at September 30, 2008 and December 31, 2007 - liquidation preference of $9,677,215 and $9,464,500 at September 30, 2008 and December 31, 2007, respectively.		6,019,917			6,019,917
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 108,762,528 and 73,722,232 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		1,087,625			737,222
Additional paid-in capital		57,670,632			56,227,221
Accumulated deficit		(72,762,173	)		(70,268,235)	)

Total stockholders' deficit		(7,983,999	)		(7,283,875)	)
Total liabilities and stockholders’ deficit	$	638,561		$	733,134

	Three months ended						Nine months ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenues:
Contract revenue	$	—		$	14,500		$	—		$	282,118
Product and other income		17,213			—			23,968			—
Total revenues		17,213			14,500			23,968			282,118

Operating expenses:
Research and development		127,721			438,858			1,253,211			1,712,011
Selling, general and administrative		236,570			452,996			748,062			1,124,294
Total expenses		364,291			891,854			2,001,273			2,836,305

Net loss from operations		(347,078	)		(877,354	)		(1,977,305	)		(2,554,187	)

Other income (expense):
Interest and other income		194			—			194			145
Interest and other expense		(183,029	)		(126,113	)		(561,271	)		(331,456	)
Gain on sale of equipment		—			—			40,646			9,510
Gain on settlement		—			—			—			193,917
Total other income (expense)		(182,835	)		(126,113	)		(520,431	)		(127,884	)

Net loss		(529,913	)		(1,003,467	)		(2,497,736	)		(2,682,071	)

Undeclared, imputed and/or paid dividends on preferred stock		69,789			69,980			207,850			215,983

Net loss applicable to common shareholders	$	(599,702	)	$	(1,073,447	)	$	(2,705,586	)	$	(2,898,054	)

Basic and diluted net loss per common share	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.04	)

Weighted average number of common shares outstanding – basic and diluted		105,944,857			67,809,204			93,614,046			68,113,966

	Nine months
	Ended
	September 30			September 30
	2008			2007
Operating activities
Net loss	$	(2,497,736	)	$	(2,682,071	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation		39,435			75,914
Share-based compensation expense		7,164			142,715
Debt discount amortization		135,449			—
Gain on sale of equipment		(40,646	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(25,592	)		43,933
Rent receivable		—			39,527
Accounts payable		114,711			(395,169	)
Accrued liabilities		490,839			345,738
Net cash used for operating activities		(1,776,376	)		(2,429,413	)

Investing activities:
Proceeds from sale of equipment		101,000			—
Net cash provided by investing activities		101,000			—

Financing activities:
Net proceeds from sale of common stock		1,655,000			—
Proceeds from issuance of debt - related party		—			2,414,484
Net cash provided by financing activities		1,655,000			2,414,484

Net decrease in cash		(20,376	)		(14,929	)
Cash at beginning of the period		21,936			73,495
Cash at end of the period	$	1,560		$	58,566

Supplemental disclosures of cash flow information
Interest paid	$	2,129		$	4,738
Non cash investing and financing activity
Issuance of common stock in settlement of indemnification obligation	$	—		$	61,067
Debt discount recorded in connection with issuance/amendment of warrants	$	135,449		$	—
Secured note payable-related party issued for payment of accrued interest	$	538,837		$	—

	September 30,			December 31,
	2008			2007
Laboratory equipment	$	298,000		$	1,378,000
Office equipment		60,000			220,000
Leasehold improvements		—			360,000
		358,000			1,958,000
Less: accumulated depreciation and amortization		(330,000	)		(1,830,000	)
	$	28,000		$	128,000

	September 30,		December 31,
	2008		2007
Payroll and employee benefits	$	65,000	$	82,000
Accounting & Professional Fees		47,000		23,000
Accrued interest		469,000		585,000
Insurance premium financing		43,000		22,000
Directors fees		90,000		60,000
Other		32,000		22,000
	$	746,000	$	794,000

	April 2006 Issuance			January 2008 Modification			January 2008 Issuance
	4/13/06 Warrant			4/13/06 Warrant			1/09/08 Warrant
Expected annual dividends		0	%		0	%		0	%
Risk-free interest rate		4.9	%		3.0	%		2.7	%
Expected term (in years)		3.0			1.3			3.1
Expected Volatility		90.0	%		157.0	%		157.0	%

Year Ending December 31,	Notes Payable Maturities
2008	$	419,000
2009		100,000
Total maturities	$	519,000

	Options Outstanding			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)
Outstanding at December 31, 2007		11,497,486			0.65			5.3
Issued		-			-
Cancelled		(156,839	)		(1.14	)
Exercised		-			-
Outstanding at September 30, 2008		11,340,647		$	0.65			4.6
Exercisable at September 30, 2008		11,269,633		$	0.65			4.6

	Number of Warrants Outstanding and Exercisable			Weighted- Average Exercise Price
Outstanding, December 31, 2007		21,771,220		$	0.40
Granted		37,478,295		$	0.08
Exercised		—		$	—
Expired		(2,798,996	)	$	(0.18	)
Outstanding, September 30, 2008		56,450,519		$	0.16

Exhibit Number		Description
10.6.1*		Secured Promissory Note Replacement Agreement, dated as of January 9, 2008, between the Company and Matthew J. Szulik.
10.6.2*		Secured Promissory Note issued to Matthew J. Szulik, dated as of January 9, 2008.
10.6.3*		Form of Warrant to Purchase Shares of Common Stock of the Company in connection with the Secured Promissory Note issued to Matthew J. Szulik, dated as of January 9. 2008.
10.6.4		Form of Promissory Note issued to noteholders, dated as of October 2, 2008 and November 3, 2008.
10.6.5		Form of Warrant to Purchase Shares of Common Stock of the Company in connection with the Promissory Note issued to noteholders, dated as of October 2, 2008 and November 3, 2008.
31.1		Certification of Interim Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Interim Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Interim Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 960 of the Sarbanes-Oxley Act of 2002.

	PROTEIN POLYMER TECHNOLOGIES, INC.

Date: November 19, 2008	By:	/s/ James B. McCarthy
		James B. McCarthy
		Interim Chief Executive Officer


Date: November 19, 2008	By:	/s/ James B. McCarthy
		James B. McCarthy
		Interim Principal Financial Officer