Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On September 26, 2007, Pharmos Corporation (the "Company") received notice from The Nasdaq Stock Market ("Nasdaq") that the minimum bid price of the Company's common stock had fallen below $1.00 for 30 consecutive business days and that the Company was therefore not in compliance with Nasdaq Marketplace Rule 4310(c)(4).

In accordance with section 4310(c)(8)(D) of the Nasdaq Marketplace Rules, the Company has until March 24, 2008 (180 calendar days from September 26, 2007) to regain compliance. No assurance can be given that the Company will regain compliance during that period.

The Company can regain compliance with the minimum bid price rule if the bid price of its common stock closes at $1.00 or higher for a minimum of 10 consecutive business days during the initial 180-day period, although Nasdaq may, in its discretion, require the Company to maintain a bid price of at least $1.00 per share for a period in excess of ten consecutive business days (but generally no more than 20 consecutive business days) before determining that the Company has demonstrated the ability to maintain long-term compliance. If compliance is not achieved by March 24, 2008, the Company will be eligible for another 180-day compliance period (until September 20, 2008) if it meets the Nasdaq Capital Market initial listing criteria as set forth in Nasdaq Marketplace Rule 4310(c) other than the minimum bid price requirement. No assurance can be given that the Company will be eligible for the additional 180-day compliance period or, if applicable, that it will regain compliance during any additional compliance period. If the Company is not eligible for an additional compliance period, or does not regain compliance during any additional compliance period, Nasdaq will provide written notice to the Company that its securities will be delisted. At such time, the Company would be able to appeal the delisting determination to a Nasdaq Listing Qualifications Panel.

---