Vystar Corp (Form: S-1, Received: 11/13/2008 15:01:52)

As filed with the Securities and Exchange Commission on November 13, 2008

Registration No. 333-_______

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

VYSTAR CORPORATION

(Exact name of registrant as specified in its charter)


Georgia	8731	20-2027731
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

3235 Satellite Boulevard

Building 400, Suite 290

Duluth,GA 30096

(770) 965-0383

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

William Doyle

Chief Executive Officer

3235 Satellite Boulevard

Building 400, Suite 290

Duluth,GA 30096

(770) 965-0383

(Name, address, including zip code, and telephone

number, including area code, of agent for service)

Copy to:

Gerald L. Baxter, Esq.

Greenberg Traurig, LLP

3290 Northside Parkway, Suite 400

Atlanta, GA 30327

(678) 553-2430

Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. o

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

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

CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered	Amount to be Registered		Proposed Maximum Aggregate Offering Price Per Unit			Proposed Maximum Aggregate Offering Price (1)			Amount of Registration Fee
Common Stock		1,100,000	$	2.00 (1	)	$	2,200,000 (1	)	$	86.46

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated _________, 2008

PROSPECTUS

1,100,000 Shares

COMMON STOCK

This is the initial public offering of common stock by Vystar™ Corporation, a Georgia corporation ("Vystar" or the "Company"). 600,000 shares of our common stock held by Universal Capital Management, Inc., a publicly held business development corporation ("UCM"), will be issued to the record stockholders of UCM on ________, 2009, the record date, upon effectiveness of the registration statement of which this prospectus is a part. Additionally, we are registering for resale up to 500,000 shares of our common stock held by selling shareholders identified in this prospectus on a delayed or continuous basis. Vystar will not receive any proceeds from the distribution or resale of such shares. No public market currently exists for the shares. We intend to apply for approval for our shares of common stock to be traded on the OTC Bulletin Board under the symbol "__________".

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE “RISK FACTORS” ON PAGE ___.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

TABLE OF CONTENTS

	PAGE

PROSPECTUS SUMMARY	1

THE OFFERINGS	4

SUMMARY FINANCIAL DATA	5

RISK FACTORS	6

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	9

MARKET AND INDUSTRY DATA	10

USE OF PROCEEDS	10

DIVIDEND POLICY	10

CAPITALIZATION	11

DILUTION	11

SELLING SHAREHOLDERS	12

PLAN OF DISTRIBUTION	13

UNITED STATES TAX CONSEQUENCES CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS	14

SELECTED FINANCIAL DATA	17

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20

BUSINESS	25

GOVERNMENT REGULATION	45

MANAGEMENT	46

LIMITATION OF LIABILITY AND INDEMNIFICATION	56

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	57

PRINCIPAL SHAREHOLDERS	57

DESCRIPTION OF CAPITAL STOCK	58

SHARES ELIGIBLE FOR FUTURE SALE	60

LEGAL MATTERS	61

EXPERTS	61

WHERE YOU CAN FIND MORE INFORMATION	61

FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only, regardless of the time of delivery of this prospectus or of any sale of the Shares. Our business, prospects, financial condition and results of operations may have changed since that date.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the “Risk Factors” section of this prospectus and our consolidated financial statements and related notes appearing at the end of this prospectus, before making an investment decision.

Overview

Vystar ^TM Corporation (“Vystar” or the “Company”) is the creator and exclusive owner of the innovative technology to produce Vytex™ Natural Rubber Latex ("NRL"). This technology reduces antigenic protein in natural rubber latex products made with Vytex to virtually undetectable levels. The allergic reactions to untreated latex are a significant detriment affecting numerous individuals globally that use many different products made with NRL. With non-latex products growing at a rapid rate due to these allergy problems, the costs for alternative materials incurred by the manufacturers of these many different products have greatly increased. Nearly all substitute materials are far more expensive than NRL – by a factor of five in some cases. Vystar is introducing Vytex NRL, its new “low protein” natural rubber latex, throughout the worldwide marketplace that uses NRL or latex substitutes as a component of manufactured products. Vystar intends for Vytex NRL to become the standard source of latex and latex substitutes, not unlike a standard computer operating system on which many other applications can run. Over 9.7 million tonnes of NRL are produced globally of which just over one million tonnes are in liquid latex form. There are more than 40,000 products made from the liquid latex while the other eight million tonnes are used to produce tires and other hard rubber products. Natural rubber latex is used in an extensive range of products including balloons, textiles, footwear and clothing (threads), adhesives, foams, furniture, carpet, paints, coatings, protective equipment, sporting equipment, and, especially health care products such as condoms, surgical and exam gloves, catheters and other items. Vystar intends to introduce Vytex NRL into the supply channels with aggressive, targeted marketing campaigns directed to the end users to create the pull-through and a competitive advantage for the manufacturers utilizing Vytex NRL, as well as to manufacturers of the end products.

On April 11, 2008, Vystar signed a definitive agreement with Revertex (Malaysia), Sdn. Bhd., a division of Yule Catto Far East and the world's largest producer of pre-vulcanized natural rubber lattices for the production of Vytex NRL. Revertex will be a non-exclusive, toll manufacturer for Vystar and has started full production mode to manufacture Vytex NRL commercially. Vystar ran its first production February 2, 2008 and has successfully completed several subsequent production runs.

History and Background

Travis W. Honeycutt, the retired CEO of the Company, is the inventor of the Vytex ^TM NRL process. He initially formed Vystar LLC, the predecessor to the Company in February 2000, as a Georgia limited liability company. The Company’s operations under the LLC entity were focused substantially on the research, development and testing of the Vytex NRL process, as well as attaining patent protection for this invention. Mr. Honeycutt provided the Company’s early financing from personal funds. In 2003, the Company reorganized as Vystar Corporation, a Georgia Corporation, at which time all assets and liabilities of the limited liability company became assets and liabilities of Vystar Corporation, including all intellectual property rights, patents and trademarks. In October 2005, the Company moved to its current location in Duluth, Georgia, part of the metro Atlanta area, and established its corporate headquarters.

Prior to retirement, Mr. Honeycutt had over thirty-five years of experience in new business and technical development in the industrial and healthcare markets. Mr. Honeycutt was a founder, former Director and former Executive Vice President of Isolyser Company, Inc., recently purchased by ECOLAB. He holds over one hundred patents and has received several awards for entrepreneurial growth and success, including Inc. Magazine’s Entrepreneur of the Year for Healthcare in the Southeast Region. Mr. Honeycutt received his Bachelor of Science degree in Fiber and Polymer Chemistry from North Carolina State University and a Masters of Science degree in Chemical Engineering from Georgia Institute of Technology. He was honored with a Doctorate degree in Physics from Solomon University in Kiev, Ukraine.

In June 2002, Vystar applied to the U.S. Patent & Trademark Office (USPTO) for domestic patent protection for its manufacturing process, which was issued on June 14, 2005 as U.S. Patent 6,906,126. In April 2005, the Company filed a continuation in part of its previously granted patent, which was approved by the USPTO a mere 6 months later in October 2005, and was ultimately filed on June 6, 2006 as U.S. Patent 7,056,970. All 13 originally filed claims were allowed in this patent that issued June 2006.

Vystar has also filed for international patent protection according to the Patent Co-Operation Treaty ("PCT"), and has been issued PCT patent No.: PCT/US2005/025018. This international patent has been filed and nationalized in the European Union (EU) as well as in China, Japan, Sri Lanka, India, Canada and South Africa. We expect patents in these countries to be issued without objection. In addition to the international country nationalizations, we are expanding our patent filings in the U.S. to go beyond pure method patents with only process method claims, and to include composition of matter claims through nationalizing the PCT patent back into the U.S. with slight modifications of the claims in the original PCT filing, thereby expanding our patent protection.

Additionally, we filed two provisional patent applications with USPTO on January 18, 2008, Serial No. 61/022,250 and July 18, 2008, Serial No. 61/081,927 to cover our R&D advancements which were the subject of our published papers and presentations at the Latex 2008 Conference in Madrid, Spain and at the International Latex Conference in Cleveland, Ohio. We are currently working to turn both provisional patent applications into a full utility patent covering both process method and composition of matter claims to cover our advancements, which will be filed by January 18, 2009.

The Company has applied for trademark protection for "Vystar", "Vytex" and our tagline "Created by Nature. Recreated by Science." in the U.S. and intends to file internationally for trademark protection. As of October 1, 2008, the time period for submitting objections expired with no objections having been filed with the USPTO. Therefore, we are awaiting the official statement of allowance from the USPTO on all three of these trademarks and are in the final stages of validating use for final approval and registration of these marks. While the Company expects trademark protection to be granted for its Company and product names, no assurance can be given that such protection will be granted in a timely manner or, if ever such protection is granted, whether it will provide substantial protection from competition. Vystar realizes that the market for Vytex NRL is an industrialized world concern; therefore, Vystar is committed to aggressively challenging any infringements of its patents and trademarks.

Mr. Honeycutt and William Doyle, President and CEO of the Company, have spoken on the Company's Vytex NRL product and its potential at a number of industry conferences, including: the International Latex Conference, in Charlotte, North Carolina (July 2005); Latex 2006, in Frankfurt, Germany (January 2006); Malaysian Rubber Glove Manufacturers Association's (MARGMA) 3 ^rd International Rubber Glove Conference in Kuala Lumpur, Malaysia (September 2006) and Latex 2008 in Madrid, Spain (January 2008), where their fourth technical paper was presented. In July, 2008, a fifth technical paper was presented by the Company’s Technical Advisor, Mark Swanson, at the International Latex Conference in Cleveland, Ohio.

The Company has also exhibited at the world's largest medical technology and equipment tradeshow at the MEDICA conference in Dusseldorf, Germany in November 2007 and 2008 as part of the State of Georgia Department of Economic Development group of companies. The Company has generated significant commercial interest in Vytex NRL in several arenas resulting from attendance at this important global conference.

Risks Factors

We are a development stage company and have generated only limited revenues to date. You should carefully consider the risks described under the “Risk Factors” section and elsewhere in this prospectus. These risks could materially and adversely impact our business, financial condition, operating results and cash flow, which could result in a partial or total loss of your investment.

Our Corporate Information

The principal executive offices are located at 3235 Satellite Boulevard, Building 400, Suite 290, Duluth, Georgia 30096, and our telephone number is 770-965-0383. Our website address is www.vytex.com.

The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

Unless the context otherwise requires, we use the terms “Vystar,” “our company,” “we,” “us” and “our” in this prospectus to refer to Vystar Corporation, and its predecessor, Vystar LLC.

THE OFFERING S

Common Stock to be Distributed	600,000 shares will be distributed pro rata to the public stockholders of Universal Capital Management, Inc. (“UCM”) by UCM at a ratio of ____ shares of our common stock for each share of common stock of UCM held by their stockholders on the record date.

Record Date	____________________________

Common Stock to be sold by the Selling Shareholders	Up to 500,000 shares

Proceeds to Vystar	None

Common Stock to be Outstanding after this Distribution	12,541,273 shares

Risk Factors	You should read the “Risk Factors” section of this prospectus. beginning at page __.

The number of shares of our common stock to be outstanding after this offering is based on the number of shares of our common stock outstanding as of November 3, 2008, and excludes:

5,941,266 shares of common stock issuable upon exercise of stock options and warrants outstanding as of May 1, 2008 at a weighted average exercise price of $.94 per share; and

An additional 600,000 shares of common stock reserved for future issuance under our equity compensation plans as of November 1, 2008.

SUMMARY FINANCIAL DATA

The following tables summarize the financial data for our business as of and for the periods presented. You should read this information together with the “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus and our financial statements and related notes included elsewhere in this prospectus.

	Year Ended December 31									Six Months Ended June 30
Statement of Operations Data:	2005			2006			2007			2007			2008
	(in thousands, except per share data)

Net sales	$	-		$	-		$	-		$	-		$	-

General and administrative (1)		657			759			703			374			1,704
Research and development (1)		604			305			428			238			291
Depreciation and amortization		5			8			9			5			1,504
Total costs and expenses		1,266			1,072			1,140			617			3,499

Operating loss		(1,266	)		(1,072	)		(1,140	)		(617	)		(3,499	)

Interest income (expense), net		-			(1	)		20			7			6
Provision for note receivable from related party		-			-			(120	)		-			-
Loss on disposal of assets		-			(13	)		-			-			-
Net loss	$	(1,266	)	$	(1,086	)	$	(1,240	)	$	(610	)	$	(3,493	)

Basic and Diluted Loss per Share	$	(0.10	)	$	(0.08	)	$	(0.09	)	$	(0.04	)	$	(0.31	)

Basic and Diluted Weighted Average Number of Common Shares Outstanding		12,509			13,185			14,495			14,114			11,422

(1) Includes stock-based compensation expense

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. As a result, you may lose all or part of your investment. Before deciding whether to invest in our common stock you should also refer to the other information contained in this prospectus, including our consolidated financial statements and the related notes.

Risks Related to Our Business

We have had very limited revenues in our history.

We have had very limited revenues in our history. While we anticipate that additional revenues will be generated by the fourth quarter of 2008, such revenues, if any, will not be sufficient for the Company to become profitable. We expect to make significant future expenditures to develop and expand our business. We may incur significant losses in the future for a number of reasons, including due to the other risks described in this prospectus, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. Accordingly, we may not be able to achieve or maintain profitability, and we may incur significant losses for the foreseeable future.

Vystar is a development stage company.

Vystar is a development stage company with limited operating experience. Vystar is in the early stages of implementing a business plan which is new to Vystar, its directors, officers and employees. The financial success of Vystar and the ultimate value, if any, of our common stock will be dependent upon the soundness of this business concept and the ability of management of the Company to successfully and profitably execute that concept.

The lack of an operations history eliminates your ability to use standard methods of company valuation, such as price/earnings ratio analysis or present value of cash flows analysis, to appropriately value the Company and an investment therein. The value of your investment in the common stock will significantly decline, or even become worthless, if our business is not successful.

Operating results could fluctuate and differ considerably from our financial forecasts.

Our business model is based on assumptions derived from (i) the experience of the principals of the Company, and (ii) third party market information and analysis. There are no assurances that these assumptions will prove to be valid for our future operations or plans.

Our operating results may fluctuate significantly as a result of a variety of factors, including:

Acceptance by manufacturers of the Vytex™ Natural Rubber Latex technology;

Our ability to achieve and sustain profitability;

Consumer confidence in products manufactured using our Vytex™ Natural Rubber Latex technology.

Our business is totally dependent on market demand for, and acceptance of, the Vytex ^TM Natural Rubber Latex process.

We expect to derive most of our revenue from the sales of our Vytex ^TM Natural Rubber Latex raw material to various manufacturers of rubber and rubber end products using NRL and/or their distributors. We will pay natural rubber latex processors a fee for the service of manufacturing and creating Vytex NRL for us under our toll manufacturing agreement. Conversely, Vystar will collect a fee under the licensing model. Our Vytex NRL product is new and operates within broad, diverse and rapidly changing markets. As a result, widespread acceptance and use of product is critical to our future growth and success. If the market for our product fails to grow or grows more slowly than we currently anticipate, demand for our product could be negatively affected.

Assertions by a third party that our process infringes its intellectual property, whether or not correct, could subject us to costly and time-consuming litigation or expensive licenses.

There is frequent litigation based on allegations of infringement or other violations of intellectual property rights. As we face increasing competition and become increasingly visible as an operating company, the possibility of intellectual property rights claims against us may grow.

Any intellectual property rights claim against us or our customers, with or without merit, could be time-consuming, expensive to litigate or settle and could divert management attention and financial resources. An adverse determination also could prevent us from offering our process, require us to pay damages, require us to obtain a license or require that we stop using technology found to be in violation of a third party’s rights or procure or develop substitute services that do not infringe, which could require significant resources and expenses.

The market in which we will participate is competitive and if we do not compete effectively, our operating results may be harmed.

The markets for our product are competitive and rapidly changing. With the introduction of new technologies and market entrants, we expect competition to intensify in the future. In addition, pricing pressures and increased competition generally could result in reduced sales, reduced margins or the failure of our services to achieve or maintain widespread market acceptance.

While early interest was strong in a new innovative product in the natural rubber latex industry, pricing and regulatory approvals remain a key selling factor especially in the exam glove arena. There is no manufacturer signed to date that has accepted Vytex NRL into its product mix.

While Vytex NRL is currently in the early stages of 510(k) application with the FDA for condoms and exam gloves, there is no assurance that either or both will be awarded approval.

An American manufacturer of condoms has been engaged in production work and has completed required testing for using Vytex NRL in their condom line and will be initiating the same with exam gloves by first quarter 2009. In the meantime, the same manufacturer will proceed with a production run of a straight dipped exam glove and proceed with the 510(k) application for the exam glove with the FDA. We have no assurance that the products will provide acceptable test results and even if they do, there is no certainty that the FDA will approve the applications.

Vystar will seek to have lower protein claims than what is currently on the market today and will ultimately seek to have latex warnings removed from all FDA-regulated products, but it cannot guarantee that either of such actions will be approved by the FDA.

The FDA scrutinizes heavily any and all claims categorizing the protein levels and other claims of a NRL product. Currently, the FDA has allowed claims only stating the level of less than 50 micrograms/gram of total extractable proteins pursuant to only one of two FDA-recognized standards. Vystar intends to claim protein levels pursuant to both of the two FDA-recognized standards, which will result in claiming the lowest level of antigenic proteins for a Hevea NRL product currently on the market. There is no guarantee that the FDA will allow these claims.

Additionally, for many years, the FDA has required warnings on products containing latex due to the latex allergy issue that exists. Vystar plans on petitioning the FDA to have that label removed from products manufactured with Vytex NRL, by filing a Citizen’s Petition. Such Petition is likely to require clinical test results indicating acceptable allergic reactions associated with Vytex NRL. There are no assurances that the FDA will grant that request.

Manufacturers are implementing trials of Vytex NRL in their facilities but final data are not yet available from all these manufacturers on its viability for their particular environments.

Samples of Vytex NRL have been made available to several natural rubber latex and latex substitute end product manufacturers. Since the completion of the Vytex NRL Standard Operating Procedures (SOPs), Vystar has toll manufactured several one-tonne production runs at Revertex Malaysia. Manufacturers that have signed a sampling agreement with us have been provided with samples of Vytex NRL for validating its use in their manufacturing processes. To date, only a small number of manufacturers have completed those runs so feedback is minimal at this point. Although most feedback received to date is positive, there is no assurance that such feedback will continue to be satisfactory.

Risks Related to this Distribution and Ownership of Our Common Stock.

The offering price of the common stock and warrants in our recently completed private placement was set arbitrarily.

In our recently completed private placement, we issued 1,189,000 shares of our common stock and 594,500 warrants to purchase our common stock, at an aggregate price of $2.00 per share and accompanying warrants. This price was set arbitrarily and there should be no implication from such pricing that the common stock now has or ever will have a market value of $2.00 per share or that such stock could ever be sold for $2.00 per share or at any price. Earlier offerings of our common stock were at prices from $1.00 to $1.50 per share of common stock, together with warrants to purchase shares of our common stock at an exercise price of $.50 per share.

Our failure to raise additional capital or generate the cash flows necessary to expand our operations and invest in our services could reduce our ability to compete successfully.

We may need to raise additional funds, and we may not be able to obtain additional financing on favorable terms, if at all. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our common stock could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

continue to expand our sales and marketing organizations;

expand our operations, in the United States or internationally;

hire, train and retain employees; or

respond to competitive pressures or unanticipated working capital requirements.

The distribution of our common stock to the UCM stockholders will be a taxable event resulting in taxable income to such stockholders.

The distribution will constitute a dividend to the UCM stockholders, taxable as ordinary income, to the extent the distribution is treated as paid out of UCM’s current or accumulated earnings and profits (as computed for federal income tax purposes).

After the completion of this distribution and resale offering, we do not expect to declare any dividends in the foreseeable future.

After the completion of this distribution and resale offering, we do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

There is no assurance that any significant public market for our shares of Common Stock will develop after the completion of this distribution of common stock to the UCM stockholders.

While we intend to apply for approval for our shares of common stock to be traded on the OTC Bulletin Board, there is no assurance that such approval will be granted or that there will be any significant public market for our common stock even if such approval is granted. Much of our common stock that has been previously issued privately and will not be eligible for public resale under SEC Rule 144 for three months after Vystar becomes a fully-reporting company under the Securities Exchange Act of 1934, as amended.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this prospectus, including statements about our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements in this prospectus include, among other things, statements about:

our plans to commercialize and market our services;

our financial performance;

the potential benefits of collaboration agreements and our ability to enter into selective collaboration arrangements;

our ability to quickly and efficiently identify and develop new products and markets for our Vytex NRL;

our ability to establish and maintain intellectual property rights; and

our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this prospectus, particularly in the “Risk Factors” section of this prospectus, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this prospectus completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

MARKET AND INDUSTRY DATA

In this prospectus, we rely on and refer to information and statistics regarding the industries and the markets in which we intend to compete. We obtained this information and these statistics from various third-party sources. We believe that these sources and the estimates contained therein are reliable, but we have not independently verified them. Such information involves risks and uncertainties and is subject to change based on various factors, including those discussed in the “Risk Factors” section of this prospectus.

USE OF PROCEEDS

Vystar will not receive any proceeds from the distribution of common stock to the UCM stockholders or the sale of common stock by the selling shareholders.

DIVIDEND POLICY

We have never declared or paid dividends on our common stock. We currently intend to retain any future earnings to finance our research and development efforts, the development of our proprietary technologies and the expansion of our business. We do not intend to declare or pay cash dividends on our capital stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2008 on an actual basis. You should read this table together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus.

	Actual
	June 30, 2008
	(unaudited)

Cash	$	798,983

Total long-term debt, including current portion	$	-

Stockholders' equity
Common stock, $0.0001 par value, 25,000,000 shares authorized		1,129
Additional paid-in capital		8,972,557
Stock subscription receivable		(20,500	)
Deferred compensation		(45,958	)
Deficit accumulated during development stage		(7,619,657	)
Total stockholders' equity		1,287,571
Total capitalization	$	1,287,571

The table above does not include:

·	5,941,266 shares of common stock issuable upon exercise of stock options and warrants outstanding as of October 31, 2008 at a weighted average exercise price of $.94 per share; and

·	an additional 600,000 shares of common stock reserved for future issuance under our equity compensation plans as of October 31, 2008.

We have 10,000,000 authorized shares of preferred stock, none of which have been issued.

DILUTION

Since neither the distribution of shares to the UCM stockholders nor the resale of shares by the selling shareholders will result in proceeds being paid to Vystar, our net tangible book value per share will not be affected by the distribution or the offering.

SELLING SHAREHOLDER S

This prospectus covers shares that were acquired from Vystar in private transactions exempt from registration under the Securities Act by Travis Honeycutt, the founder of the Company. Mr. Honeycutt acquired the shares in 2003 and is reasonably believed to be an "accredited investor" as defined by Regulation D under the Securities Act. Mr. Honeycutt has retired from active involvement with Vystar as a result of personal health issues. At his request, the Company has agreed to register a portion of the shares of common stock that he has owned since Vystar’s inception for resale. In connection with such registration, Mr. Honeycutt has transferred approximately fifty (50%) percent of his shares of Vystar common stock to his wife, Margaret Honeycutt.

The following table presents information regarding Mr. Honeycutt and Mrs. Honeycutt. The table includes:

Name.

·	The nature of any material relationship within the last three years between Mr. Honeycutt or Mrs. Honeycutt, and Vystar.

·	The number of shares of our common stock beneficially owned by Mr. Honeycutt and Mrs. Honeycutt prior to this offering.

·	The number of shares of our common stock offered hereunder by Mr. Honeycutt and Mrs. Honeycutt.

The number and percent of shares of our common stock beneficially owned by Mr. Honeycutt and Mrs. Honeycutt after the offering is complete. This calculation assumes that all shares are sold pursuant to this offering and that no other shares of common stock are acquired or disposed of by Mr. Honeycutt or Mrs. Honeycutt prior to the termination of this offering.

Mr. Honeycutt and Mrs. Honeycutt are offering for sale with this prospectus up to the number of shares listed below subject to the limitations described in the section of this prospectus entitled "Plan of Distribution."

Name	Shares of common stock Beneficially Owned before the Offering		Shares of common stock Registered in this Offering		Shares of common stock Owned After Offering		Percentage of Outstanding common stock Beneficially Owned After the Offering
Travis Honeycutt*		2,497,000		250,000		2,247,000		17.92	%
Margaret Honeycutt**		2,497,000		250,000		2,247,000		17.92	%

*	Mr. Honeycutt is the founder of the Company. Mr. Honeycutt was a director, Chairman of the Board and Chief Executive Officer of the Company from organization to March, 2008.

**	Mrs. Honeycutt is the wife of Mr. Honeycutt. She has never had any relationship with the Company.

PLAN OF DISTRIBUTION

We are registering the resale of the shares on behalf of the selling shareholders. We will keep this prospectus effective until the earlier of (i) two years from the effective date of the registration statement of which this prospectus is a part, or (ii) such time that all of the shares have been sold pursuant to the prospectus or Rule 144 under the Securities Act or any other rule of similar effect. As used in this prospectus, the term "selling shareholders" includes the pledgees, donees, transferees or other successors-in-interest selling shares received after the date of this prospectus from the selling shareholders as a gift, pledge, partnership distribution or other non-sale related transfer. The selling shareholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling shareholders may use any one or more of the following methods when selling shares:

·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

·	an exchange distribution in accordance with the rules of the applicable exchange;

·	privately negotiated transactions;

·	short sales;

·	broker-dealers may agree with the selling shareholder to sell a specified number of such shares at a stipulated price per share;

·	a combination of any such methods of sale; and

·	any other method permitted pursuant to applicable law.

The selling shareholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. Broker-dealers engaged by the selling shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling shareholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by the selling shareholders. The selling shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.

The selling shareholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 supplementing or amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.

The selling shareholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 supplementing or amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.

The selling shareholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by the selling shareholders. If we are notified by a selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling shareholders use this prospectus for any sale of the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act.

The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of our common stock and activities of the selling shareholders.

UNITED STATES TAX CONSEQUENCES

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain U.S. federal income tax consequences to a United States person who acquires our common stock in the distribution from UCM or in the sale by the selling shareholders. This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury Regulations promulgated or proposed thereunder, administrative pronouncements of the Internal Revenue Service (the "IRS") and judicial decisions as of the date hereof, all of which are subject to change at any time, possibly retroactively. There can be no assurance that the IRS will not take a view contrary to that set forth herein that may be upheld by a court. No ruling from the IRS or opinion of counsel has been or will be sought as to any of the matters discussed below.

This summary is for general information purposes only and applies only to an investor who holds our common stock as a capital asset within the meaning of section 1221 of the Code. It does not purport to address all tax consequences that may be relevant to any particular investor or to an investor subject to special tax rules, including certain types of persons subject to special treatment under the Code, including insurance companies, tax-exempt organizations, financial institutions, dealers in securities or foreign currencies, persons holding the Notes as part of a hedging or constructive sale transaction, straddle, conversion transaction or other integrated transaction, persons that have a functional currency other than the U.S. dollar, investors in pass-through entities or arrangements, and persons who are not citizens or residents of the United States or that are foreign corporations, foreign partnerships or foreign estates or trusts. In addition, the discussion does not address any aspect of state, local or foreign taxation or other federal taxes.

EACH PROSPECTIVE INVESTOR IN OUR COMMON STOCK IS URGED TO CONSULT HIS TAX ADVISER CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO HIM OF ACQUIRING, OWNING AND DISPOSING OF A COMMON SHARE, AS WELL AS THE APPLICATION OF STATE, LOCAL AND FOREIGN INCOME TAX LAWS AND OTHER TAX LAWS.

Distribution From UCM

Our common stock that a stockholder of UCM receives from UCM will be treated as a distribution on that UCM stock in an amount equal to the fair market value of our common stock on the date of the distribution. That distribution will constitute a dividend to the UCM stockholder, taxable as ordinary income, to the extent the distribution is treated as paid out of UCM’s current or accumulated earnings and profits (as computed for federal income tax purposes). To the extent the distribution is not treated as paid out of UCM’s current or accumulated earnings and profits, it will be treated as a non-taxable return (and reduction) of the UCM stockholder’s basis in his UCM stock, to the extent thereof, and if and to the extent the amount of the distribution exceeds earnings and profits and basis, it will be treated as gain from the sale of the UCM stock on which it is paid. Dividends received by a corporation are generally eligible for the dividends received deduction, subject to limitations, including the limitations under section 1059 of the Code relating to extraordinary dividends.

A UCM stockholder’s initial tax basis in our common stock will be equal to the fair market value of the common stock on the date UCM distributes that stock. The holder’s holding period for our common stock will begin on the day after the date of the distribution from UCM.

Purchase From Selling Shareholders

A prospective investor who purchases our common stock in the sale by the selling shareholders will have an initial tax basis in our common stock equal to the purchase price paid for that stock. The investor’s holding period for that common stock will begin on the day after the date of purchase.

Distribution on our Common Stock

If we were to pay a distribution on our common stock, that distribution would constitute a dividend, taxable as ordinary income, to the extent the distribution is treated as paid out of our current or accumulated earnings and profits (as computed for federal income tax purposes). To the extent the distribution is not treated as paid out of our current or accumulated earnings and profits, it will be treated as a non-taxable return (and reduction) of basis in our common stock, to the extent thereof, and if and to the extent the amount of the distribution exceeds earnings and profits and basis, it will be treated as gain from the sale of our common stock. Dividends received by a corporation are generally eligible for the dividends received deduction, subject to limitations, including the limitations under section 1059 of the Code relating to extraordinary dividends.

Subsequent Disposition of our Common Stock

Upon a subsequent sale or other taxable disposition of our common stock, you generally will recognize capital gain or loss equal to the difference between the amount realized and your tax basis in the common stock. That gain or loss generally will be long-term capital gain or loss if the common stock was held for more than one year. The deductibility of capital losses is subject to limitations.

Backup Withholding

You may be subject to backup withholding at the rate of 28% of the dividends you receive on our common stock or on the proceeds from a sale or other taxable disposition of our common stock unless (a) you are a corporation or other exempt recipient or (b) you provide, when required, your taxpayer identification number to the payer, certify that you are not subject to backup withholding and otherwise comply with the backup withholding rules. Backup withholding is not an additional tax; any amount so withheld is creditable against your federal income tax liability or is refundable, provided you furnish the required information to the IRS.

SELECTED FINANCIAL DATA

You should read the following selected financial data together with our financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this prospectus. We have derived the statements of operations data for the years ended December 31, 2006 and 2007 and the balance sheet data as of December 31, 2006 and 2007 from our audited financial statements included elsewhere in this prospectus. We have derived the statement of operations data for the years ended December 31, 2003, 2004 and 2005 and the balance sheet data as of December 31, 2003, 2004 and 2005 from our unaudited financial statements not included in this prospectus. We have derived the statements of operation data for the six months ended June 30, 2008 and the balance sheet data as of June 30, 2008 from our unaudited financial statements included elsewhere in this prospectus. Our unaudited financial statements for the six months ended June 30, 2008 have been prepared on the same basis as the annual financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of this data in all material respects. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period, and our results for any interim period are not necessarily indicative of results for a full fiscal year.

SELECTED FINANCIAL DATA

															For the
															Six Months
	Year Ended December 31														Ended
($ in thousands)	2003		2004			2005			2006			2007			June 30, 2008

Net sales	$	-	$	-		$	-		$	-		$	-		$	-

General and administrative		-		155			657			759			703			1,704
Research and development		-		345			604			305			428			291
Depreciation and amortization		-		-			5			8			9			1,504
Total costs and expenses		-		500			1,266			1,072			1,140			3,499

Operating loss		-		(500	)		(1,266	)		(1,072	)		(1,140	)		(3,499	)

Interest income (expense), net		-		-			-			(1	)		20			6
Provision for note receivable from related party		-		-			-			-			(120	)		-
Loss on disposal of assets		-		-			-			(13	)		-			-
Net loss	$	-	$	(500	)	$	(1,266	)	$	(1,086	)	$	(1,240	)	$	(3,493	)

	Year Ended December 31											June 30
	2003		2004		2005			2006		2007		2008		2007
Balance Sheet Data:
Cash	$	-	$	353	$	30		$	420	$	573	$	799	$	735
Total current assets		-		353		35			436		651		1,488		1,043
Total liabilities		-		236		232			279		220		330		223
Total shareholders' equity		-		117		130			457		575		1,288		868
Working capital (deficiency)		-		353		(180	)		175		447		1,173		875

SELECTED FINANCIAL DATA

Condensed Statement of Operations Data:

										February 2, 2000
										(inception)
							Six Months			through
	Year Ended December 31,						Ended June 30,			June 30,
	2006			2007			2008			2008
Net sales	$	-		$	-		$	-		$	-
Total operating expenses		1,072			1,140			3,499			7,512
Loss from operations		(1,072	)		(1,140	)		(3,499	)		(7,512	)
Interest income		-			20			6			26
Provision for note receivable from related party		-			(120	)		-			(120	)
Loss on disposal of assets		(13	)		-			-			(13	)
Interest expense		(1	)		-			-			(1	)
Net loss	$	(1,086	)	$	(1,240	)	$	(3,493	)	$	(7,620	)
Net loss per share, basic and diluted	$	(0.08	)	$	(0.09	)	$	(0.31	)

	December 31		December 31		June 30
	2006		2007		2008
Condensed Balance Sheet Data:
Total current assets	$	436	$	651	$	1,488
Total assets	$	736	$	794	$	1,617
Total current liabilities	$	261	$	204	$	315
Total stockholders' equity	$	457	$	575	$	1,288

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this prospectus. The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that may cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this prospectus.

Overview

Vystar LLC, the predecessor to the Company, was formed February 2, 2000, as a Georgia limited liability company by Travis W. Honeycutt. The Company’s operations under the LLC entity were focused substantially on the research, development and testing of the Vytex™ Natural Rubber Latex ("NRL") process, as well as attaining intellectual property rights. In 2003, the Company reorganized as Vystar Corporation, a Georgia Corporation, at which time all assets and liabilities of the limited liability company became assets and liabilities of Vystar Corporation, including all intellectual property rights, patents and trademarks.

We are a developmental stage company whose primary activities since inception have been devoted to the development of NRL and raising capital, but our focus is changing to developing the market for NRL and beginning operations. As we move from a development stage company to a product vendor, we expect that our financial condition and results of operations will undergo substantial change. In particular, we expect to record both revenue and expense from product sales and to incur increased costs for sales and marketing expenses. Accordingly, the financial condition and results of operations reflected in our historical financial statements are not expected to be indicative of our future financial condition and results of operations.

Significant Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on the accompanying consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. As such, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. Our management reviews its estimates on an on-going basis. We base our estimates and assumptions on historical experience, knowledge of current conditions and our understanding of what we believe to be reasonable that might occur in the future considering available information. Actual results may differ from these estimates, and material effects on our operating results and financial position may result.

Non Cash Compensation Expense - On January 1, 2006, Vystar adopted SFAS No. 123(R), Share Based Payment . SFAS No. 123(R) requires all share-based payments, including grants of employee stock options and warrants to third parties, to be recognized in the financial statements based on their fair values.

On a quarterly basis, Vystar computes the value of newly granted awards by utilizing the Black-Scholes valuation model based upon their expected lives, volatility for publicly held companies that are similar to us since we are not yet publicly held with an active market for our stock, and the risk-free rate on US Government securities with matching maturities. The value of the awards are then straight-line expensed over the lives of the purchase options and expensed when vested (or over the service life, if applicable) for the warrants.

Discussion of Financial Results

Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006

Revenues

We had no revenues in either period since we are a development stage company that had yet to commence revenue generating operations.

Operating Expenses

Our operating expenses were $1,139,845 and $1,072,086 for the years ended December 31, 2007 and 2006, respectively, for an increase of $67,759. This increase in operating expenses was due primarily to increased research and development activities.

Included in our operating expenses for the year ended December 31, 2007 was $427,530 for research and development expenses compared to $304,680 for 2006, a 40% increase primarily resulting from increased employee compensation and benefits. General and administrative expense had a 7% decrease to $712,315 from 2006’s expenses of $767,406.

Research and development expenses currently consist primarily of compensation for employees and contractors engaged in internal research and product development activities; laboratory operations, and related operating expenses. These expenditures are expensed as incurred.

General and administrative expense consists primarily of compensation and support costs for management and administrative staff, and for other general and administrative costs, including executive, accounting and finance, legal, consulting and other operating expenses.

We expect general and administrative expense to increase in future periods as we increase the level of corporate and administrative activity, including significantly increased expenditures related to the future production and sales of our products.

Other Expense

Other Expense was $99,789 for the year ended December 31, 2007, consisting of $20,416 of interest income on cash deposits, reduced by $120,205 charged against operations as a provision for a note receivable from a related party. This compares with the $13,400 loss on disposal of assets and $811 of interest expense, or a net Other Expense in 2006 of $14,211.

Net Loss

Net loss was $1,239,634 and $1,086,297 for the years ended December 31, 2007 and 2006, respectively, for an increase of $153,337, primarily resulting from increased research and development and general and administrative expenses as described above.

Comparison of Six Months Ended June 30, 2008 to Six Months Ended June 30, 2007

Revenues

We had no revenues in either period since we are a development stage company that had yet to commence revenue generating operations.

Operating Expenses

Our operating expenses were $3,499,499 and $617,007 for the six months ended June 30, 2008 and 2007, respectively, for an increase of $2,882,492. In 2008, $1,467,006 was recorded for stock-based compensation as well as an additional $1,499,737 for amortization of deferred compensation. This compares with $75,781 for stock-based compensation in 2007 for the same period and no amortization of deferred compensation. The stock-based compensation charges to operations in 2008 were primarily for incentive stock options granted under our Incentive Stock Option Plan to executive officers and were made so that their interests would be aligned with those of shareholders, providing incentive to improve Company performance on a long-term basis. Grants of warrants were also made to third parties for various services rendered to preserve operating capital.

Included in our operating expenses for the six months ended June 30, 2008 was $290,615 for research and development expenses compared to $237,665 for the six months ended June 30, 2007 and $3,208,884 for general and administrative expenses compared to $379,342 for the same period in 2007. Besides the stock-based compensation charges discussed above, general and administrative expenses increased $68,932 during the first six months of 2008 compared with 2007 due to increased staffing and marketing efforts as we move toward becoming a product vendor.

We expect to continue to incur substantial research and development expenses for clinical trials, regulatory submissions, assistance with manufacturing trials, and product enhancements.

We expect general and administrative expense to remain relatively stable in future periods as we increase the level of corporate and administrative activity, including increases associated with our operation as a public company, and significantly increase expenditures related to the future production and sales of our products. Offsetting these increases will be a reduced level of stock-based compensation from what we experienced during the first half of 2008.

Other Income (Expense)

Other income was $6,244 for the six months ended June 30, 2008, consisting of $6,297 of interest income on cash deposits and other expense of $53, compared to $7,161 of interest income for the same period ended June 30, 2007.

Net Loss

Net loss was $3,493,255 and $609,846 for the six months ended June 30, 2008 and 2007, respectively, for an increase of $2,883,409, primarily resulting from research and development and general and administrative expenses incurred as described above.

Liquidity and Capital Resources

As of June 30, 2008, we had $798,983 in cash and $500,000 in short term investments consisting of a certificate of deposit.

Sources and Uses of Cash

For the six months ended June 30, 2008 and 2007, net cash used by operations was $398,774 and $594,827, respectively. The negative cash flow at June 30, 2008 resulted from the net loss of $3,493,255 reduced by stock-based compensation charges $1,557,709, amortization of deferred compensation $1,499,737, depreciation $3,585, and amortization of $1,502 as well as increases in accounts payable $69,715 and accrued expenses $41,576 net of an increase in prepaid expenses of $78,079. The negative cash flow for the six months ended June 30, 2007 resulted from a net loss of $609,846 for the period reduced by stock-based compensation expense $115,591, depreciation $3,315 and amortization of $1,192. Increases in prepaid expense $25,649 and other assets of $24,079 along with a reduction of accrued expenses of $60,713 were responsible for most of the remaining negative cash flow from operations for the period.

For the years ended December 31, 2007 and 2006, net cash used by operations was $1,042,904 and $761,273, respectively. The net loss for 2007 of $1,239,634 was reduced by stock-based compensation expense $152,936, a provision on a related party note receivable of $120,205, depreciation $6,603, and amortization $2,384 as well as an increase in accounts payable of $14,696. Increases in prepaid expenses $12,456 and other assets of $14,079 and decreases in accrued expenses of $71,851 accounted for most of the remaining difference between the net loss and cash used by operations for 2007. For 2006, a net loss of $1,086,297 was reduced by stock-based compensation expense $259,945, depreciation $5,952, amortization $2,090, and a loss on disposal of assets of $13,400. An increase in prepaid expense of $6,807 and a decrease of accounts payable of $97,795 was offset by increases in a related party accounts payable of $31,196 and accrued expenses of $108,294 to account for most of the remaining negative operating activities cash flow for 2006.

Net cash (used in) or provided by investing activities was ($524,142) and $5,000 for the six months ended June 30, 2008 and 2007, respectively. The investing activities during the six months ended June 30, 2008 were due to the purchase of a short-term investment of $500,000; expenditures of $15,822 for legal expenses related to our patents and $8,320 for purchases of new equipment. The $5,000 provided by investing activities for the six months ended June 30, 2007 were advances to a related party under a note receivable.

Net cash used in investing activities was $7,802 and $2,509 for the years ended December 31, 2007 and 2006, respectively. The investing activities during 2007 involved proceeds of $5,000 received from a related party note receivable reduced by $12,802 for legal expenses related to patents. During 2006, investing activities consisted of $12,981 advanced to a related party under a note receivable and $12,500 proceeds received from that same related party note receivable as well as $2,028 for purchases of new equipment.

Net cash provided by financing activities for the six months ended June 30, 2008 and 2007, respectively, was $1,148,722 and $905,148. During the six months ended June 30, 2008, we received proceeds from the sale of common stock and warrants of $1,148,722. This is net of issuance costs of $140,861 for the period. During the six months ended June 30, 2007, we received proceeds from the sale of common stock and warrants of $905,148, net of issuance costs of $55,135.

Net cash provided by financing activities was $1,204,145 and $1,153,156 for the years ended December 31, 2007 and 2006, respectively. For the year ended December 31, 2007, we received proceeds from the sale of common stock of $1,204,145, net of issuance costs of $71,559. During 2006, we received proceeds of $1,153,156 from the sale of common stock, net of issuance costs of $91,047.

Our future expenditures and capital requirements will depend on numerous factors, including: the rate at which we can introduce and sell NRL to manufacturers; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and market acceptance of our products and competing technological developments. We expect that we will incur in excess of $2 million of expenditures over the next 12 months. As we expand our activities and operations, our cash requirements are expected to increase at a rate consistent with revenue growth after we have achieved sustained revenue generation.

Our business does not presently generate the cash needed to finance our current and anticipated operations. We believe we have raised sufficient capital to finance our operations for the next twelve (12) months, and until we have sustained revenue generation during the second quarter of 2009.

We expect that our cash used in operations will increase during the remainder of 2008 and beyond as a result of the following planned activities:

·	The addition of staff to our workforce as needs arise;

·	Increased spending for the expansion of our research and development efforts, including clinical trials, regulatory submissions, assistance with manufacturing trials and product enhancements;

·	Increased spending in marketing as our products are introduced into the marketplace;

·	Increases in our general and administrative activities related to our operations as a reporting public company and related corporate compliance requirements.

Inflation and Seasonality

We do not believe that our operations are significantly impacted by inflation. Our business is not seasonal in nature, but is subject to commodity pricing. Our product is a commodity-based raw material.

BUSINESS

History of NRL and its Allergenicity Problems

Natural rubber latex is an agricultural product produced from the sap of the rubber tree, Hevea brasiliensis . Natural rubber latex is composed of cis-isoprene molecules that are formed from naturally produced proteins found in the rubber plant’s sap. These molecules in their mature state provide both the elasticity and the liquid barrier properties of latex that make NRL such a highly desired material. Once believed to be an inert substance, NRL has become recognized as a major cause of allergic and sensitization reactions, especially among healthcare workers and their patients. One of the naturally occurring proteins, the Rubber Elongation Factor (REF), has been identified as the primary cause of the allergenic reactions to NRL in its unattached or immature state. Contact with the REF, whether by direct skin, aerosol protein forming on powders used in manufacturing, the decomposition of latex or even invasive surgery or inadvertent consumption causes the body to react, often detrimentally, to the REF (an “allergic” reaction).

Many physicians and researchers have become concerned that even minimal exposure to NRL may trigger reactions in certain patients who are particularly sensitive to the antigenic proteins. A variety of reactions may occur in persons allergic to NRL, ranging from dry, itchy, irritated skin and more severe skin reactions similar to those associated with poison ivy, to severe asthma and other respiratory problems and, more rarely, to anaphylactic shock, which may be life-threatening. Reports as to the prevalence of NRL allergy vary greatly. Published data indicate that 1% to 6% of the general population suffers from NRL sensitivity, yet approximately 8% to 18% of regularly exposed individuals have some level of NRL allergy. Other studies have shown that 54% of sensitized hospital workers had severe reactions to latex exposure.

Beginning in 1997, a number of product liability lawsuits claimed that manufacturers negligently made NRL products that contained allergy-triggering proteins. In September 1997, the United States Food and Drug Administration (FDA) issued a medical glove powder report, which outlined the hazards of NRL use, as well as many negative aspects of glove powder. The FDA issued recommendations to control the use of glove powder and reduce the level of protein in gloves, based on the findings of their report. A significant regulatory development came from the FDA, which issued a labeling rule, effective September 30, 1998, requiring manufacturers of NRL medical products to label their goods with a warning that NRL may cause an allergic reaction. In January 2008, the FDA issued an updated Medical Glove Guidance which remained substantially the same as the 1998 report, although the agency indicated that work was being done to investigate more sensitive testing methodologies, potentially opening the door for different label claims in the future.

Current Production of NRL

In 2007, over 9.7 million tonnes of NRL are produced globally, of which just over 1.0 million tonnes are liquid latex according to the International Rubber Study Group, Singapore for (e.g., gloves, condoms, catheters and other products that require multiple layers of the NRL) and other latex end products such as foams, adhesives, etc. Since NRL is used in over 40,000 products worldwide, to include textiles, footwear and clothing, toys, automotive parts, housing, furniture, carpet, coatings, protective equipment, sporting equipment and especially health care products, there are few industries untouched by NRL and its allergy concerns.

Substantially all of the latex processors are located in South East Asia, India, Africa and Central America and are owned by local groups or large multinational corporations. Thailand leads the world in NRL production with over 620,000 tonnes produced in 2007, a third of all global production. Malaysia is second with 170,000 tonnes and followed by India with 75,000 tonnes.

The typical processor acquires raw NRL (or “field latex”) aggregated from latex plantations. The processors in South East Asia have a worldwide advantage, since latex is predominately a product of that area and labor and water are abundant and inexpensive. However, because of the intrinsic allergenic problems of NRL, the processors’ market volume had been level, if not slightly decreasing, for many years. Significant price and demand increases in NRL have turned the industry into a “sunrise” industry. A sunrise industry indicates a replanting of the natural rubber plantations to keep up with growing worldwide demand. Some reports show a shortage of NRL in the coming decade as a demand in developing countries such as China and India continues to grow. This future demand is awakening interest in other areas of the world where the climate is suitable, particularly in Guatemala, where it is expected the latex industry to grow from 57,000 tonnes produced in 2006 to over 95,000 tonnes by 2016, a 40% increase. This is particularly attractive to U.S. manufacturers of latex products who could potentially see reduced transportation costs and lead times over the usual Asian sources.

Traditional users of NRL as a product component have been seeking and developing alternative synthetic raw materials. An example of the desire for NRL occurred during Vystar focus groups when surgeons and nurses, asked to design the perfect glove, invariably come up with a non-allergenic NRL glove.

Currently, it is estimated that NRL processors have lost one-half the overall latex market to synthetic latex, despite the higher costs and recent capacity issues of these synthetic materials. This fact, coupled with the easy transition to the process to manufacture Vytex NRL, makes it very attractive for the processors to regain lost business.

Products and Services (Vytex NRL)

The process to manufacture Vytex NRL has been developed to reduce the antigenic properties of the REF protein in NRL, without causing noticeable changes in the highly desirable physical or chemical properties of the remaining molecules and without disrupting the traditional methods of production. In elementary terms, NRL is farmed from rubber tree plantation groves located primarily in South East Asia. Processors collect the field latex, concentrate the latex, age the product, and prepare the latex to specifications required by product manufacturers. Vystar has proved that the best point to produce Vytex NRL is while NRL is in its raw liquid stage, prior to dipping or manufacturing the latex into other forms. The manufacturing process may occur entirely within a direct manufacturer that takes the NRL in its raw, harvested form all the way through to the final product, such as a large glove manufacturer, but this is rare. Usually, there may be several sub-manufacturers fabricating components to be used in final products, such as elastic thread manufacturers selling product to the bedding and clothing manufacturers. Although not part of the manufacturing process, the links between the NRL processors and the first manufacturer are distributors specializing in NRL, similar to those participating in other agricultural commodity trading.

The Vytex NRL process removes a significant amount of the antigenic protein from the natural rubber latex. Economically, the process to manufacture Vytex NRL is relatively inexpensive. The additional chemicals required by Vytex NRL represent a small fraction of the total cost of processed NRL and can be easily incorporated into current manufacturing streams, with little or no additional cost. The process to manufacture Vytex NRL requires the addition of a proprietary blend of chemicals to the raw liquid NRL. The chemical solution is mixed into the raw liquid NRL and allowed to stir for a specific period of time in order for the reactions to occur at room temperature, then centrifuged. From this point, Vytex NRL is aged, tested, stored, and shipped in a manner similar to NRL. Repeated testing, over 500 tests, has demonstrated stability and parity essential with non- Vytex NRL in terms of function (chemical and physical properties) and quality of material. Vystar has developed and has implemented a quality assurance (QA) binder to ensure consistent, repeatable Vytex NRL production.

Vystar has begun evaluation trials with manufacturers in the medical device, surgical glove, condom, foam and other key product categories worldwide. Vystar expects that Vytex NRL will demand a premium price due to its low antigenic protein levels, ease of manufacturing integration, and its “green” environmental profile while maintaining the desired or improved properties of NRL. A key US manufacturer has initiated the 510(k) process required by the United States Food and Drug Administration (FDA) for using Vytex NRL in condoms.

Vystar does not intend to process the NRL or manufacture any finished latex product. Therefore, it must show the NRL producers and product manufacturers the economic value proposition of including Vytex NRL in their product lines. The advantage is that Vystar will not require the infrastructure and other investment costs to develop and operate a processing or manufacturing facility. Vystar has the flexibility of offering and accepting two different models for revenue. First, Vystar has contracted with a major processor as a “toll manufacturer” who processes the concentrated Vytex NRL for a fee, while Vystar is responsible for marketing and selling. Alternatively, this processor can contract to market and sell the prevulcanized Vytex NRL (PV Vytex) using the Vytex NRL trademark, and pay Vystar a licensing fee for the Vytex NRL processed. Initial PV Vytex results indicate that low protein, high performance products can be made from PV Vytex NRL and commercial availability is expected in first quarter 2009.

Additionally, the company has successfully produced laboratory samples of low ammonia Vytex NRL (LA Vytex) and has shipped LA Vytex to manufacturers for trials and product evaluation. Low ammonia is preferred by manufacturers in specific product applications including catheters, breather bags, foam, etc. The company is investigating the use of Vytex NRL in ammonia free applications. Ammonia free NRL is currently being used in the U.S. for body painting as it eliminates skin and respiratory irritation caused by ammonia. Additional processors can be added as geographic and volume conditions warrant under similar terms as stated above, to follow the manufacturing trail to India, Turkey and other countries where manufacturing costs are more competitive.

Each strategy will provide Vystar attractive profit margins and net income, since there will be no costs for direct manufacturing infrastructures. Vystar is optimistic that this vendor relationship can be achieved, and is already being proven with one of its current strategic alliances, Revertex Malaysia, discussed below. Since the Vystar proprietary process is inexpensive and simple, using the same equipment and procedures now in place at the NRL processors, it is an easy implementation and offers a solution to the NRL processor’s shrinking market share woes. In addition, negotiations are underway to create a distribution network for North America and Europe that will further enhance Vystar’s ability to cost effectively reach and service manufacturer customers .

Revertex (Malaysia), Sdn. Bhd., a division of Yule Catto Group Far East, is the world’s largest producer of prevulcanized natural rubber lattices. A Toll Manufacturing Agreement was signed on April 11, 2008, between Vystar and Revertex, covering the areas of processing and technical support. Revertex will be a non-exclusive, toll manufacturer for Vystar and has started full production mode to manufacture Vytex NRL commercially. Revertex is producing Vytex NRL in accordance with the Company’s proprietary processes and Standard Operating Procedures (SOPs) and is shipping Vytex NRL to latex product manufacturers labeled as Vytex NRL.

Since the introduction of Vytex NRL at various latex and medical conferences, manufacturers of mattresses, threads, surgical gloves, breather bags, probe covers, condoms, balloons, adhesives, etc., have expressed an interest in securing evaluation samples of Vytex NRL. This, in turn, expands the opportunity to market and sell Vytex NRL across a wide range of industries globally. Vystar will strategically respond to meet these new manufacturing demands. Similarly, recent press releases have caused several potential customers in newer, non-medical markets to initiate discussions with Vystar. Due to the relative ease with which these other non-healthcare markets may be entered, compared to the United States healthcare markets, management is entering these markets as a first step while it prepares to enter the United States healthcare market.

Vytex NRL Allergenicity Testing & Results

Vystar has treated NRL using the patented Vytex manufacturing process, and then analyzed the resulting material with both chemical and biological immunoassay tests. Over 500 tests were performed by the LEAP Testing Service of the Guthrie Foundation for Medical Research, an independent, highly respected analytical laboratory specializing in immunoassays of NRL for antigenic proteins. Vytex NRL has produced results on finished products that are both “below detection” and “not detectable”, and these results have been reproduced in subsequent tests.

The Modified Lowry test is a chemical analysis test that has become the more-often referenced of the two recognized national standards for measuring proteins in NRL (ASTM D5712). This chemical analysis method is based on the binding of chromogenic dye to protein residues as a point of measurement. One early sample of NRL provided to the laboratory had a pre-Vytex NRL manufacturing process measurement in the area of 750 micrograms of total protein per gram of NRL. The results of testing the Vytex NRL product produced readings that were “below detection”. However, the minimum detection level for the Modified Lowry test is 28 micrograms per gram. To some degree, this result is not an exceptional reading, since there are several existing post-manufacturing processes of latex glove manufacturers that, in certain circumstances, also produce “below detection” levels. The unanswered question therefore is “How much below detection?”. The Modified Lowry method detects “total” protein and cannot differentiate that small fraction of antigenic protein.

Subsequently, Vystar NRL turned to a more specific assay to further define Vytex NRL. The LEAP test (ASTM D6499-07), the other of the two recognized national standards, is an immunochemical test applied to rabbit and human tissue and measures much needed levels of the antigenic proteins. This test is approximately 150 times more sensitive than the Modified Lowry test methods, and has a minimum level of detection of 0.2 micrograms per gram. Repeated tests reported an antigenic protein level less than 0.2 micrograms per gram for several products made with Vytex NRL. Vystar is seeking FDA clearance to make claims to this standard with respect to the finished medical devices using Vytex NRL. In the FDA’s recently published Medical Glove Guidance in January 2008, the agency stated that work was currently underway to determine the sensitivity and detection limits of the ELISA test method, a positive step towards more specific labeling allowances.

To fully validate the Vytex process, The Company is investigating the use of a spectrophotometric method (280nm-protein absorbance) to further quantify morphed proteins no longer immuno-reactive (recognized by the ELISA antibodies used in the LEAP testing method). The MOLAR Ò -Micro Optic Latex Analyte Registry-assessment of protein is observed directly and immediately and can be used quantitatively for Vytex NRL preparations as well as native NRL sources. Management believes that with additional laboratory experimentation, further reduction of the antigenic protein is possible with adjustments to the timing and duration of the Vytex NRL manufacturing process steps. However, there can be no assurances that either further reduction can be attained or complete elimination is effective below the minimum detection levels.

Additionally, there are other specifications that must be met in order to have a Vytex NRL product that is suitable for the process required to manufacture many end products, and which are needed to entice manufacturers to use it. These necessary physical, chemical and mechanical property tests are continually being performed by independent laboratories on each scale up run of Vytex NRL, and currently show parity with the non-Vytex NRL. By showing this parity, Vystar believes that the Vytex NRL process has produced NRL that has “below detection” antigenic protein, yet will be able to fit within the current manufacturing processes by industry.

The Market

As reflected in the illustration above, NRL is harvested and processed from its raw liquid stage into a more usable form for manufacturers primarily in the South East Asia region. However, the majority of the NRL product consumption is in the North American region, followed closely by the EU. Therefore, with Vystar’s key strategic relationship with Revertex Malaysia and Vystar’s management expertise and contacts in the North American and EU markets, Vystar is well-positioned to take advantage of its new technology for a low protein NRL.

As shown in the pie chart below, the marketplace for non-tire rubber is very diverse and sizeable. According to the International Rubber Study Group world-wide consumption of liquid latex reached just over one million tonnes. The Group predicts future demand to reach just over 1.32 million tonnes in 2010 and to 2.01 million tonnes in 2020. Based on the current pricing of NRL, the overall market is valued at just above $2 billion. The price of NRL fluctuates regularly and is updated daily on the web site of the Malaysia Rubber Board ( www.lgm.gov.my ).

The key market segments that Vystar will focus on to launch Vytex NRL are: surgical gloves, exam gloves, threads, foams, adhesives, balloons, condoms and catheters. Also, Vystar has keen interest from companies in the “other” category that offers a quick entry to the marketplace, and will only add to the vast opportunities represented by the target markets referenced above and reflected in the chart below.

Worldwide Use of Natural Rubber Latex

Source: International Rubber Study Group 2006 Report, Singapore

Vystar intends to develop and implement a robust marketing strategy aimed at consumers to drive demand to manufacturers adopting Vytex NRL into their product portfolio. An important aspect to the Company’s strategy will be ingredient branding, creating demand for a brand within a product, and thus differentiating the manufacturer and product leading to consumer brand loyalty. Ingredient branding has been a highly successful strategy within the computer and chip industries for over twenty years.

With the global emphasis on the environment, Vystar is well positioned to take advantage of the trends towards the consumer’s desire for more natural, healthier green products and the world’s need to adopt more eco-friendly policies. Vytex NRL is an all natural composition, free of known or expected human carcinogens commonly found in synthetics, naturally bactericidal and resistant to dust mites, a common allergy inducer in pillows and bedding products. In addition, natural rubber latex is biodegradable. In a study conducted by a large balloon trade association, latex balloons degrade in the same amount of time as an oak leaf. The “green” benefits of natural rubber latex and Vytex NRL will be the cornerstone of our marketing efforts to capitalize on and offer solutions for this economic, political and cultural world-wide trend.

To accelerate the awareness of Vytex NRL and, in turn, induce the manufacturer to adopt Vytex into their product portfolio, Vystar will engage in a comprehensive consumer branding campaign during the fourth quarter 2008 and throughout 2009. The campaign will be aimed at all consumers in all markets, such as condoms, foam bedding, gloves, adhesives, and balloons, using trade PR, established media vehicles, the internet and public service announcements.

With over 40,000 products produced with NRL covering 20 plus industries, Vystar intends to focus its sales and marketing efforts in those product areas where there exists strong demand for NRL and where synthetics have flourished due to the latex allergy issue. Diversification is the cornerstone of our sales strategy, focusing on manufacturers large and small, global and regional, in regulated and non-regulated markets and with the market leaders and those who strive to be. Of particular interest to Vystar are those unique manufacturers who operate within the featured category with a niche product, who have the ability to differentiate their product and/or service and successfully create greater profitability on smaller volumes.

Surgical and Exam Gloves

According to the most recent Frost and Sullivan Report (2002), the United States medical examination glove market is approximately $1.0 billion for end product sales, with over 24 billion medical examination gloves sold each year. The United States surgical glove market, which requires a higher grade of glove, is approximately $280 million with 380 million pairs of surgical gloves sold annually. The United States healthcare market accounts for approximately 60% of the worldwide consumption of examination and surgical gloves with the European countries accounting for most of the remaining 40%. Since the need for the low protein Vytex NRL is so significant in the healthcare segment, and since health care providers are influential and progressive, successful product introduction into this market will enhance its acceptance by other market segments. Approximately 17% of all health care workers have allergenic sensitivity to NRL. Exam gloves are integral to the practice of medicine, and are the most preferred NRL products in the healthcare workplace. The reason gloves are so critical to the healthcare industry is that they are the first line of defense against infection. Natural rubber latex (vs. synthetic) gloves are perceived to be the best barrier available.

Consequently, because of the allergenic problems associated with natural rubber latex gloves and the myriad of substandard synthetic alternatives to natural rubber latex, the manufacturer may have a dozen or more different types of gloves to provide a hospital client. In fact, the manufacturing trend has been to increase the number of stock keeping units (SKUs) with items ranging from natural rubber latex gloves to synthetic alternatives (vinyl, neoprene, nitrile , polyisoprene, etc.). All of these alternatives cost more than the NRL gloves, with some costing up to 4 or 5 times that of NRL. These costly alternatives, with higher production and development costs, may or may not be producing commensurate increases in profitability for the manufacturers due to the pricing pressures and long term contracts with group purchasing organizations (GPOs) and integrated hospital networks (IHNs). Vystar expects to demonstrate that Vytex NRL is an across-the-board alternative, holding the highest standards of elasticity, tactile sensation and liquid barriers, yet having ultra-low levels of antigenic protein, allowing the purchasing institutions to reduce their SKUs.

The chart below highlights the distinct advantages of Vytex NRL over alternative materials:

Medical Gloves Raw Material Characteristic Comparison

Currently, the exam glove marketplace is fragmented with over 40 different glove manufacturers, all with at least some foothold in the United States market. However, there are only four glove manufacturers with significant market shares. Although these four companies provide a majority of the medical gloves sold in the United States, no individual company has a majority of the market share. Recently, the “all other” category of manufacturing companies has emerged as the largest segment in the exam glove arena, comprised mainly of Asian manufacturers who distribute under their own brands and also provide OEM manufacturing for the distributor seeking greater profitability and brand equity, benefits not received from the dominant brand manufacturers.

The largest market segment for both surgical and exam gloves is acute care hospitals, where manufacturers sell by negotiated contract, either directly to the hospital or through a buying group representing several hospitals. Conversely, the alternate site healthcare markets (physicians, dentists, nursing homes, etc) are strongly influenced by the distributor servicing their entire medical supply needs and have been slower to align with a purchasing group. Another market segment that Vystar intends to tap into is government and institutional sales, where exam glove usage has exploded in recent years as barrier protection for workers is of concern in agencies such as Homeland Security, TSA, Public Health Service, Department of Defense and others, utilizing a network of minority, disabled and veteran-owned businesses.

The U.S. surgical glove market, like exam gloves, is dominated by four major companies; Molnlycke Healthcare (Sweden), Cardinal Health Care (Dublin, OH), Ansell Ltd. (Australia) and Medline (Mundelein, IL). Vystar has introduced Vytex NRL to the surgical glove manufacturers and has contracted with several and started evaluation trials globally. Market share is influenced two ways; surgeon preference and GPO/IHN contracting. Vystar intends to increase healthcare workers’ awareness of, and therefore demand for, products manufactured with Vytex NRL through an extensive public relations and marketing campaign aimed at the clinician directly and the clinical advisors of the major purchasing groups and hospital networks. A similar brand marketing campaign to other latex market segments heavily influenced by the choosers and users, such as condoms, is expected to run concurrently with the glove campaign.

The allergic reaction of healthcare workers to non-Vytex NRL has a significant effect on the choice of NRL used in the medical industry. With synthetic latex products growing at a rapid rate, the processors of NRL are losing potential revenue while the healthcare industry itself faces higher costs of procurement for these non-latex products. Vystar is introducing Vytex NRL, its new “low protein” NRL, throughout the global marketplace now using NRL or synthetic latex substitutes as a component of manufactured products. Vystar’s goal is for Vytex NRL to become the industry standard for latex. Because the synthetics have a potential negative health and environmental impact due to the chemicals used in their manufacturing proccesses, it is very reasonable and likely that Vystar will achieve this goal.

Vystar management knows of no other commercially available chemical method of removing antigenic proteins that is applied to raw liquid NRL prior to manufacturing of finished latex products. There are certain procedures, such as chlorination, in the glove manufacturing process that attempt to wash the proteins from the finished glove product. This chlorination process, which is mostly a surface treatment, is ineffective in removing all of the protein. Furthermore, it degrades the elasticity and liquid barrier properties of latex. Almost every application of latex or rubber products has synthetic substitutes. Some of these substitutes compromise the intended purpose of the final product. Also, a large number of synthetics are substituted for reasons unrelated to latex allergies. However, some very large markets have adopted synthetics solely to address the allergy issue.

As the largest potential customer for Vytex NRL, the Vystar sales strategy is to entice the glove manufacturer and distributor to add a Vytex NRL glove product among its current SKUs offered to the healthcare buyer and enhance their product portfolio. Vystar is confident the manufacturers will see that using the liquid Vytex NRL in the manufacture of its gloves will add only a small percentage to the overall production costs of NRL gloves. The raw NRL material costs are a fraction of the total cost of the gloves, which includes labor, packaging, shipping, etc.

Similarly, Vystar is confident that the manufacturer can be shown that the resulting Vytex NRL glove can be priced competitively, especially against other costly synthetic gloves. In fact, the healthcare workers and facilities would likely pay a higher price for better quality, lower protein NRL gloves, thereby avoiding the higher priced synthetic alternatives as well as the workers’ compensation claims associated with latex allergies. In any event, however, the manufacturers’ end product pricing is solely their decision. Pricing either may be held constant or given small increases to increase market share, or it could be raised substantially to compete with synthetic glove prices and thus increase unit margins. Vystar is confident that the result will be that Vytex NRL can capture a significant portion of a manufacturer’s NRL source. If two of these four major manufacturers (or several of the second tier manufacturers) adopt a glove manufactured with Vytex NRL, Vystar expects these gloves will be the accepted alternative and become the standard in the marketplace.

Condoms

The worldwide condom market has slowed in year to year growth since the frantic growth of the early AIDS epidemic. Currently, the market grows 3.5 to 4.5 % annually which uses a much larger base than the pre-AIDS years. Strong growth can be attributed to the developing nations such as China, India and South East Asia. Established markets, such as the United States, Great Britain and Europe, are still projected to show moderate volume gains.

A breakdown of condom consumption globally is as follows:

Country	% of Usage			Volume (000s)
Asia Pacific (India, China, SE Asia)		51.0	%		7,420
Latin America		13.9	%		2,074
Europe		11.4	%		1,654
United States		8.9	%		1,299
Japan		5.6	%		813
Rest of World		5.1	%		742
Canada		3.7	%		536

This is expected to change as the number of new HIV (Human Immunodeficiency Virus) infections is on the rise throughout East and Central Asia, Eastern and Western Europe, the UK and the United States. HIV is the precursor to AIDS (Acquired Immunodeficiency Syndrome) and can take years for a person infected with HIV to reach the AIDS stage. The World Health Organization (WHO) estimates 33.2 million people world-wide were living with HIV in 2007. Some 2.5 million people became newly infected, and 2.1 million died of AIDS, including 330,000 children. Two thirds of all HIV infections are in sub-Saharan Africa.

Alarming HIV infection rates are occurring in countries previously believed to be immune due to religious, socio-economic and political factors (China, Vietnam and Russia). New cases in eastern Europe and central Asia have doubled in the period 2001-2007, from 630,000 cases to over 1.6 million. Today, Russia and the Ukraine alone represent 90% of these new cases . Harsh economic conditions in the Caribbean have fueled active cases to 230,000, three-quarters of those located in Haiti and the Dominican Republic. Globally, more than half of all new HIV infections occur in those under the age of 25, according to the Centers for Disease Control and Prevention (CDC).

Source: UNAIDS 2008 Report on the Global Aids Epidemic

The CDC recently revised earlier estimates of 40,000 new HIV infections in 2006 to 56,300 in the U.S. alone. An area of concern for public health officials is the rise in HIV infections among African Americans, now accounting for two-thirds of the reported new cases. Most affected are young black MSM (men having sex with men) and black women, with infection rates nearly 15 times higher than white women and estimated to be 4 times higher than Hispanic women.

The chart below details AIDS cases (2006) by race/ethnicity in the United States:

	Living with AIDS		% of AIDS Diagnoses			% of Population
White, Non Hispanic		394,024		30	%		66	%

African American		409,982		49	%		12	%

Hispanic		161,505		19	%		15	%
Through 2006

HIV prevention and education are the cornerstones of the global efforts to contain these spiraling rates. The hallmark of prevention is the male latex condom, the most efficient and available technology to reduce the sexual transmission of HIV ¹ , according to the UNAIDS, the Joint United Nations Programme on HIV/AIDS. The organization goes on to say “Condom promotion must be incorporated into a comprehensive prevention strategy that involves leadership from all sections of society, addresses cultural norms and beliefs, promotes gender equality, and promotes widespread knowledge and awareness of how HIV is transmitted and how condoms can avert infection. ¹ ”

World-wide prevention programs and the education of at-risk population groups will continue to encourage condom usage. UNAIDS 2008 Report on the Global Aids Epidemic report condom usage among young people (ages 15-24) has increased in recent years. Today, just over 14 billon condoms are sold world-wide with approximately 1.3 billion sold in the United States. The average selling price is $0.19 per unit for a total product market of $238.9 million.

Eighty-one percent of the condoms sold world - wide are made from NRL. The cost to produce a condom (1.5 g NRL) is $0.05 to $0.07 prior to adding advertising costs. World-wide condom usage of over 14 billion units translates to 17,013 tonnes of NRL used in the manufacturing process for a potential Vystar gross sale of $9.4 million. While the condom market is considerably smaller than the glove market, the consumer branding potential that exists here is attractive as U.S. consumers generally purchase based on brand over price. On an individual basis, the average Indian uses 4 condoms per year, while the world wide average is 15 per year. On the other side of the spectrum, the average for the Japanese is 100 per year.

The dominant global manufacturers include SSL International, plc, a British firm, the leading manufacturer at 21% of the market, Ansell Limited (Australia) at 12%, Church and Dwight (United States) having 7% and Okamoto (Japan) at 7%. Okamoto has the #1 brand in Japan, France, Germany and the Nordic countries and Church and Dwight with the leading brand, Trojan, in the United States. Vystar has sample agreements in place with several condom manufacturers worldwide.

Vystar is currently engaged with a U.S. condom manufacturer and a 510(k) required by the United States Food and Drug Administration (FDA) for using Vytex NRL in condoms has been filed. Vystar intends to develop and implement a multi-faceted marketing plan to increase condom consumption overall and build brand equity and visibility for Vytex NRL. Vystar strategies include aligning with federal, state and local HIV/AIDS planning councils and AIDS Service Organizations (ASOs) to assist in the education and promotion of condom usage to reduce the risks of transmission. Vehicles will include public service announcements, focus groups, educational programming, and sampling programs.

Another venue for Vytex NRL condom sales is the government and institutional markets where large amounts of condoms are purchased by agencies providing public health and family planning, the Department of Defense and Veteran’s Administration. Vystar expects to utilize a network of minority, disabled and veteran-owned businesses to reach these government markets.

Latex Bedding and Foams

Natural rubber latex is widely used to manufacture mattresses, padding, toppers and pillows for the bedding industry. Natural rubber latex foam is gaining popularity in the United States bedding industry because it is firm, yet conforming to the body, so it provides a very high level of rest and comfort during sleep. Plus, it is a naturally derived, renewable material with superior resiliency properties when compared to SBR (synthetic) foams. NRL foam is three times more resistant to dust mites than ordinary mattresses, estimated to be a factor in 50 to 80 percent of asthmatics.

¹ http://www.unaids.org/en/PolicyAndPractice/Prevention/Condoms/

Opening Price Points

	Furniture Stores						Bedding Specialists
	Lowest Reported		Median		Highest Reported		Lowest Reported		Median		Highest Reported

Innerspring	$	99	$	399	$	799	$	159	$	199	$	399
Memory Foam (SBR)	$	199	$	999	$	1,699	$	199	$	899	$	1,699
Latex Foam	$	699	$	1,699	$	1,999	$	799	$	1,199	$	1,949
Air	$	1,199	$	1,699	$	2,899	$	899	$	1,499	$	2,199

Source: Retail Bedding Spotlight, Furniture Today, June 2, 2008

In 2005, approximately 75,000 tonnes of NRL were used in the foam industry. NRL foam consumption has grown slightly less than 10,000 tonnes over a 15-year period from 1989. Asia consumes 47,000 tonnes of NRL foam and Europe consumes 28,500 tonnes.

According to United States bedding manufacturers, NRL sales in the bedding market have increased more than 70% over the past two years alone. Natural rubber latex has captured over 18% of the specialty sleep market and is projected to grow by 75% over the next two years , at a price point significantly higher than the traditional innerspring market. Latex foam is now accepted by consumers and retailers as a premium bedding component. More and more manufacturers are jumping on the green bandwagon by adding natural rubber latex to their product portfolios, Englander Sleep Products (Billerica, MA), Simmons (Atlanta, GA), Sealy (Trinity, NC) and Spring Air (Tampa, FL) are just a few featured at the Las Vegas Market in the summer of 2008. The percentage of U.S. households spending $1,000 or more for bedding doubled between 2000 and 2006, accounting for more than 27% of the total purchases.

As consumers increase their spending on bedding they are also spending more on the accessories to protect their bedding investment including pillows and mattress toppers. According to Furniture Today in their 2006 Bedding Retail Survey reported the price points on sleep pillows ranged from $6 to $200, with latex and down at the higher ends of the pricing scale.

In the European market, NRL foam is the dominant material used in comfort applications. However, before latex formulations were improved, latex foam was prone to degradation over the long term, developing a disagreeable odor in the process. Polyurethane (PUR) foams offered less performance to NRL foam at a lower price. Today, PUR foam controls a major part of foam bedding in the comfort market. The companies that hold a 75% market share (polymer) in this market are BASF Group (Germany), Dow Chemical (US) and Bayer Material Science (Germany).

The European market predominantly uses mechanical spring mattresses when taken as a whole and beyond just the comfort or luxury applications, which accounts for 60% of the total mattress consumption. PUR foam mattress accounts for about 25% of the mattresses consumed. Natural latex foams possess 15% of the market share in the mattress segment and is largely restrained by its higher cost.

The consumer demand for high-end bedding is being driven by a new awareness of the physical and mental benefits of sleep world-wide. Sleep has fueled a new area of medical research with most major universities and medical institutions engaged in some form of sleep research or programming.

The Better Sleep Council (BSC) reports in the 2007 Better Sleep Month survey that only 27% of Americans get the proper amount of sleep each night (7.5 – 8.5 hours) and 8 out of 10 report at least one negative work side-effect of not having a good night’s sleep. The top three areas impacted; lack of quality and accuracy of work (31%), clear thinking or judgment (31%) and remembering important details (30%). The Better Sleep Council Canada reports that one in four Canadians are clinically sleep deprived.

The BSC estimates sleep deprivation and sleep disorders cost the U.S. over $100 million annually in medical expenses, absenteeism, productivity losses, property and environmental damage. In a consumer survey, this same group reported that 97% of respondents agreed that a good night’s sleep is essential to quality of life and 91% agreed that a good mattress is essential to health and wellbeing. The survey respondents also perceived the cost of a mattress has increased and the majority agreed that price is directly proportional to quality, higher cost equals higher quality.

Another area important in the increase of NRL demand in the bedding industry is the rise of allergies and asthma, triggered by allergens. While many allergy symptoms are seasonal, many individuals suffer from perennial allergies and asthma caused by indoor allergens, such as dust mite droppings, indoor molds and pet dander. The Academy of Allergy, Asthma and Immunology (AAAI) reports approximately 20 million Americans have asthma in the U.S., of which 9 million are children under the age of 18, contributing to more than $11.5 billion in direct health care costs annually.

Vytex NRL offers a solution to both of these important health issues facing this industry. Natural rubber latex is naturally hypoallergenic, dust mite resistant, and bactericidal, inhibiting the growth of bacteria, mold and mildew, all known to cause allergies and asthma. In addition, Vytex NRL in its natural state is free of the chemicals typically found in synthetic foams known to cause odor and allergy symptoms.

There are several manufacturers of NRL foam serving the European market, including four market leaders: Latexco (Belgium & US), Dunlopillo (UK), Sapsa (Italy) and Dunlop Tech GmbH (Germany). With the increase in domestic demand, several US manufacturers, including Latex Foam International (Shelton, CT) and Sealy Corporation (Trinity, NC) are expanding their manufacturing operations to accommodate future growth.

Vytex NRL foam is well-suited for the foam industry because of its low antigenic protein levels. Although skin contact is rare with foam, direct skin contact with bedding materials can serve as a carrier of latex proteins that reside on the outer surface of the NRL foam products. Since Vytex NRL is made with a process that removes antigenic proteins and other non-rubber solids, the resultant Vytex NRL product foam sample products are far less odorous compared to non-Vytex NRL foam that contains high levels of biodegradable proteins.

Vytex NRL is very stable latex due to the reduced protein content and added surfactant. During the manufacturing of foam products from latex, higher shear stress may be exerted on the latex. High shear stress begins with the mixing process and is continued during the storage and dipping process. In the process used to produce foam, high shear stress occurs at the foam head of the machine. The latex must be able to withstand such shear stresses without flocculating. Vytex NRL has a decided advantage for a foam producer, due to its inherent stability under shear stress.

A comparison of NRL foam and other competing foams as extrapolated from a chart by Latex Foam International follows in the chart below:

	Natural Latex Foam	SBR Latex Foam	PUR Foam
History	First produced in 1929	Used to produce foam in the early 60s.	Also produced in the early 60s.
Description	Extremely durable highly resilient, non-toxic and environmentally safe.	Produced from petrochemicals. Does not have the inherent physical and biological properties of NRL.	Produced from a polyol & TDI (isocyanate and cause toxic fumes).
Recovery	Very Resilient	Not as Resilient	Slow Recovery
Support	Support without pressure to the body and is self-ventilating	Does not give support and ventilation efficiently	Poor porosity and does not dissipate body heat and perspiration efficiently
Bacterial Properties	Natural	None	None
Durability	Durable and resilient	None	Poor resilience
Patterns	Unique pattern of small pin-hole cavitations on both sides making the hardness characteristics isotropic. This ensures that the surface is uniform and provides maximum comfort.	Also has a unique pattern of small pinhole cavitations on both sides and the hardness characteristics are isotropic.	Generally, does not have the unique pattern and cavitations of Latex Foam and does not give maximum comfort.
Dust/Asthma Issues	Does not get lumpy, create dust or fluff and is excellent for asthma sufferers.	Does not get lumpy or create dust and fluff.	Can get lumpy, create dust and fluff and is not satisfactory for asthma suffers.
Temperature & Humidity	No dampness, remains ventable	Does not dissipate heat, moisture and perspiration well.	Mattresses become damp and will not ventilate when not used. Perspiration is not dissipated.
Toxicity	On ignition, produces black smoke mostly containing unburnt carbon	On ignition, produces black smoke containing phenolic substances, which are toxic.	On ignition, produces toxic fumes, which can suffocate and cause physical injury.

Two of the leading global bedding manufacturers have expressed a significant interest in Vytex NRL and evaluation trials began in 3Q2008. Successful trials could get Vytex NRL into this market in 2009 for sponges and mattresses. Additionally, Vystar has successfully completed a manufacturing trial run with a global manufacturer of consumer sponges with a full production run expected.

To drive consumer demand for Vytex NRL bedding products, Vystar must look to the internet, where over 60% of consumers turn to conduct research prior to shopping, particularly consumers with incomes over $50K. However, when they are ready to purchase, more turn to specialty bedding stores (44%) or furniture stores (35%) than to the internet (1%). Incorporation of the internet and alliances with key specialty bedding distributors will be a key component of the Vytex branding campaign for bedding.

Adhesives

Adhesives are broadly composed of caulks, sealants, fillers, construction materials and variously defined adhesives. Adhesives can be divided into different types based on their chemistry. “Super glues,” or cyanoacrylates, are the “polymerize in place” type with or without a catalyst. Acrylates and methacrylates can also polymerize in place with the aid of a catalyst (an example is bone “cement” used in surgery). Hot melts are another type of adhesive and are generally polyolefins (or other polymers) with low melting points. The hot melt adhesives, once melted in a pot or a hand device, are applied to a surface(s) and allowed to cool (freeze) and thus stick together the two surfaces. Two-part adhesives represent another type of adhesive and are usually epoxies. The two parts are dysfunctional and form a very strong cross-linked condensation polymer. Epoxies are used extensively in the industrial and construction sectors due to their very high strength. Mucilages are another type of adhesives often characterized by “Elmer’s Glue,” which was originally marketed heavily by Borden. Elmer’s Glue is basically a polyvinyl acetate water emulsion. The adhesive is applied to porous surfaces and allowed to dry. This type of adhesive is simple, functional and inexpensive and works well in very light industrial applications as well as in domestic and educational venues. A more durable “marine use” product is also available. It is a more sophisticated polymer ester and resists marine moisture. Again, these materials are available as emulsions, water solutions and organic solvent solutions and become effective as the solution (or emulsion) evaporates and dries.

Pressure Sensitive Adhesives (PSAs), are typically used in the label market, dominated by large players such as Avery Dennison (Pasadena, CA), 3M (St. Paul, MN), and Raflatac (Sweden). PSA technologies include hot melt whereby the adhesive is melted, coated onto face stock, cooled and laminated; emulsions and solvents undergo less processing with an adhesive solution coated, dried and laminated. Much of the PSA market has transitioned from NRL to other synthetic materials, including acrylics, and conversions back to NRL would require an extensive raw material qualification process that is unlikely to receive interest among the primary manufacturers. For these reasons, Vystar intends to focus on the Cold Seal or Cohesive market, where NRL has desirable features and benefits.

Cold seal adhesives or “cohesives” are primarily found in the flexible food packaging, medical and paper markets. Natural rubber latex is used extensively in the flexible packaging market in packaging for chips, snacks, candy bars, etc. The sealants have to be water and oxygen barriers because they are overcoated onto one side of the package film and have to be approved for food contact. Some films are now pattern-coated so there is no food contact. These sealants are generally two parts: one part is a hydrocarbon such as NRL and the other part is an acrylic acid ester polymer as a tacky substance. The acrylic acid ester provides quick grab, and the adhesive such as NRL, provides pressure-sensitive holding and barrier properties. NRL excels at flexibility at low temperatures and thus is the performance leader. The raw material market is small and consolidated with the key players being Bostik/TOTAL (France), Henkel International (Germany), Akzo Nobel N.V. (Netherlands) and DOW Chemical (Midland, MI). Multiple companies participate in the chain from raw material through finished product, including compounders, printers and packagers.

While this market is fragmented, Vystar believes cold seal adhesives are a target for Vytex NRL due to the market’s perceived advantages NRL has over synthetics in the areas of cold flow and outstanding “stick”; very important qualities to ensure even coating and a good seal. Vytex NRL provides a solution to NRL’s disadvantages as well since poor mechanical stability inherent in NRL is improved by the Vytex process which removes the substances in NRL subject to free radical breakdown resulting in a more stable and a less odorous product.

There have been some reports of allergic reaction to these NRL adhesives found in or around food packaging. Also, since there is no treatment of the finished product as in the glove industry, Vytex NRL with its low-levels of antigenic protein at the outset is an excellent match. The Company believes that the Vytex NRL would be well-received in this market. The volume of NRL used for cold-seal adhesives is believed to be close to 7,500 tonnes in just the British and German markets and is based on population size since so much of the cold adhesives are used in the food industry.

Vystar is engaged with a regional distributor in the United States specializing in the adhesives industry which has led to a large number of Vytex NRL evaluations. In addition, several manufacturer evaluations are underway in the graphics and coatings markets and adhesives for these and the flexible food packaging markets could account for Vystar’s early sales of Vytex NRL.

While the U.S. adhesives market for medical tapes is approximately 15,000 tonnes per year, Vystar expects this market to be more challenging to enter since it operates within the medical device area regulated by the Food and Drug Administration (FDA) and subject to the same labeling requirements as other regulated products (gloves, catheters, etc) as discussed earlier. Outside the U.S. Vystar has received interest in the Asia markets for bandages, dressings and other medical adhesives and has begun evaluations with a large Asian manufacturer.

Balloons

Vytex NRL has several aspects that make it well-suited in the balloon industry. The low initial modulus of Vytex NRL suggests that less force is required for a user to mouth inflate a Vytex NRL balloon. Additionally, because Vytex NRL has greater ultimate elongation, the balloon can accommodate more air or helium thus staying inflated for a longer period of time compared to ordinary NRL. The low antigenic protein value of Vytex NRL could be attractive since the balloon is typically inflated by the mouth and also handled by small children.

The world-wide latex balloon industry is estimated at over $235 million USD and growing at 7-15% annually. The worldwide consumption of NRL for the balloon industry is estimated at 27,000 tonnes annually The two major consuming countries of NRL balloons are the U.S. with 9,500 tonnes annually and Europe at 2,200 tonnes annually in 2004. Each balloon on average costs $0.04 to produce and uses approximately 1.5 g of NRL. The industry is split between Mylar and NRL.

The Growth of Balloon Consumption Globally:

Country	USD (000s)		Share			Growth
Germany		29,124 $		12	%		24	%
Singapore		20,986 $		9	%		103	%
U.S.		15,652 $		7	%		7	%
China		13,308 $		6	%		29	%
U.K.		12,545 $		5	%		3	%
France		9,867 $		4	%		9	%
Italy		9,156 $		4	%		23	%
Belgium		8,719 $		4	%		35	%
Spain		7,912 $		3	%		11	%
Netherlands		7,908 $		3	%		14	%
Denmark		6,796 $		3	%		-1	%
Canada		6,406 $		3	%		4	%
Sweden		6,112 $		3	%		5	%
Mexico		5,865 $		2	%		29	%

The leading global balloon manufacturers are:

Company	NRL	Mylar
Anagram International, Inc. (Minneapolis, MN)		Ö
Pioneer Balloon (Qualatex) (Wichita, KS)	Ö	Ö
Betallic LLC (St. Louis, MO)	Ö	Ö
Everts International (Germany)	Ö	Ö
CTI Industries (Lake Barrington, IL)	Ö	Ö

Mylar balloons are very seasonal with the majority of sales occurring between December and March. NRL balloon sales are more consistent for a 12 month period, as the majority of NRL balloons are purchased and distributed through “big box” retailers as toys, gifts and party supplies. Mylar is the only substitute for NRL balloons because of the required barrier properties of latex. Although both NRL and Mylar balloons can be filled with helium, Mylar balloons are pre-formed and they can only be filled with helium. Mylar balloons are significantly more expensive compared to NRL balloons. Over 90% of Mylar sales occur in the U.S. because helium is priced reasonably in the United States and supply has been adequate to meet demand.

Balloons are synonymous with children, they come into contact with balloons on a regular basis at home, schools, stores and restaurants. This level of exposure concerns many who are latex allergic or linked to latex allergy through a cross-reactivity with certain foods. There is a reported correlation between food allergies and latex allergy, a shared antigenic component found in certain fruits and vegetables including banana, avocado and to a lesser extent, peanuts and other tree nuts. The American Academy of Asthma and Immunology reports up to 8% of children have food allergies. Children with spina bifida or subjected to multiple medical interventions throughout their lives have a higher exposure to latex and, therefore, a significant greater risk of latex allergy over the general population (up to 73% vs. 1-6%). These issues have given rise to a cluster of U.S. and international support groups dedicated to raising the consumer awareness of latex allergy. Two key domestic groups are the American Latex Allergy Association and ELASTIC (National Latex Allergy Network), both very active in the consumer and legislative arenas, including efforts to ban latex balloons from hospitals and schools.

The Latex Allergy Support Group (LASG), located in the United Kingdom, surveyed 374 members regarding their reactions to natural rubber latex balloons. Over 30% responded (109) of which 89% have been diagnosed as Type I latex allergic (97). The majority of the respondents have symptoms present when touching, blowing up the balloon or being in a closed area containing balloons. Twenty percent of the survey respondents required a medical intervention (use of adrenaline) after exposure.

Vystar expects these support groups to continue to grow in both political and consumer strength in the U.S. and abroad, providing good opportunities for Vytex NRL and the message of low protein latex as an alternative. We are engaged in discussions with one of the largest global manufacturers and intend to actively pursue this market utilizing alliances with the latex allergy support groups, balloon artists and the balloon manufacturers.

Fibers, Yarns, Threads, Cords, Fabrics

The global textile industry manufactures fabrics and garments for uses as varied as clothing, shelter, and fire and ballistic protections. The textile industry produces fibers (both staple and continuous filament), yarns, threads and fabrics. The fibers, yarns and threads are manufactured into woven, non-woven, and knit fabrics. Woven fabrics are produced from yarns inter-tangled at perpendicular angles, whereas non-wovens are produced directly from entangled fibers. Knits are formed by the tangential intersection of loops to form a variety of patterns. The basic chemistry of fibers has not changed for decades, while production has shifted from the industrialized world to less industrialized countries. Basic fiber ingredients are cellulosic (cotton, flax, linen, rayon), polyester, nylon, acrylic, protein (wool, camel hair, etc) and modacrylic, olefin and spandex (also known as elastane). This business plan is focused on the natural rubber thread business and regaining market share lost to spandex due to the “allergy” scare with NRL.

Spandex, the generic term for elastic thread, was first invented by DuPont. The most notable brand is Lycra, a trademark of Invista (formerly DuPont). Sales of spandex yarns have been sluggish; in 1980 sales amounted to 25,000 tonnes with a drop-off in subsequent years to 20,000 tonnes and finally rebounding back in 1997 to 1980 levels. Compared with the known sales for NRL yarn which has increased dramatically over a similar time period; growing from a low of 50,000 tonnes in 1989 to 146,000 tonnes in 2006, according to a report by Frost and Sullivan.

Spandex producers tend to be very large, well-capitalized, chemical companies such as Invista (USA), Bayer (Germany), Asahi Kasei (Japan) and many others. On the other hand, NRL yarn producers are small, local companies. Spandex is produced from crude oil and natural gas, two non-renewable products, whereas NRL yarns are produced from renewable trees, an agricultural product. The spandex producers do extensive marketing and selling directly through their own employees. The NRL producers do little to no marketing and sell through a mixture of brokers, agents, and jobbers who will sell only on price and availability, and offer no up-selling based on product differentiation. The NRL manufacturing sector lends itself to consolidation with a product that provides clear differentiation, such as that which Vytex NRL yarns would provide. Manufacturers produce in very large quantities and stage for each shipment – 20,000 to 40,000 pounds at a time (20 – 40 foot containers). Natural rubber yarn production has increased from approximately 50,000 tonnes in 1989 to about 135,000 tonnes in 2004, despite “allergy” warnings that have appeared on garments containing NRL yarn.

There are no direct competitors to NRL yarn use in socks, underwear, waistbands, ladies foundation garments and cords (such as bungee). Spandex is a synthetic elastane, and an indirect competitor only that has used the “allergy” issue as a lever to enter these markets at a cost that is several times more expensive. Currently, there are no branded NRL yarns and no advertising of the benefits of a NRL yarn Spandex, although generically branded, has primarily been used in sportswear, outerwear and other-wear, sheer hosiery, and pantyhose. These markets are not typically markets for natural rubber yarn. Another venue identified is the eco-friendly shoe industry where cork platforms are typically mixed with latex to form the shoe-bed. Vytex NRL provides a compelling green and health story for these niche manufacturers and consumers.

The thread market is very attractive to Vystar and has the potential to become a large sector as the dollar volumes are significant even with a very small percentage of the market converting to Vytex NRL if adopted by one of the large, international textile manufacturers (Hanes, Fruit of the Loom) or thread producer like World Flex Public Company, a leading manufacturer of extruded rubber threads. Vystar may be able to introduce the Vytex NRL brand similarly to the existing branded products. Vystar has identified key thread, clothing and shoe manufacturers and is actively pursuing them.

Catheters

The catheter market is a high growth segment due to the aging population around the world with increasing incidences of urinary incontinence, chronic cardiovascular and cancer-related diseases, and to the evolution of medicine in finding alternative non-invasive techniques to treat patients, which in many cases utilize catheters, particularly with respect to cardiac procedures. There are 4 main catheter products: coronary or cardiovascular, renal or urinary, neurovascular (used to infuse or remove drugs or fluids from the body parts) and infusion or venous access (used to infuse or remove drugs or fluids from the body’s general circulation). There are also a number of specialty catheters used in pulmonary, neonatal, central nervous system and epidural tissue procedures.

Western Europe has 18 of the 19 countries with the highest percentage of the global aging population with the U.S. being the nineteenth. There were 68.2 million people in Western Europe over the age of 65 in 2005, or 17% of that population. This segment is estimated to increase to 25% of the population by the year 2030, with a direct correlation to the increase in the age-related medical conditions. Forty-one percent (41%) of all deaths in the EU were from cardiovascular disease, and more than 50% of all deaths in the U.S. in 2003 were from heart diseases or cancer. Add to this increased healthcare need the fact that the current costs of treating vascular occlusive disease is a major concern and a challenge for the European governments and healthcare providers, due in large part to its burdensome costs.

The primary materials used for catheters, in addition to NRL, are silicone rubber and the thermoplastic elastomers like polyurethane and fluoropolymers. Natural rubber latex’ largest competitive material for catheters is silicone. The catheters and tubing make up the highest single source of medical silicone products – about 32% of the entire medical silicon e market (which is not expected to change much through 2012). Two of the greatest perceived benefits of using the silicone material for catheters are that silicone is non-allergenic and provides greater patient comfort, due to its perceived compatibility with antimicrobial coatings. In fact, the number one market driver of the silicone catheters in the U.S., according to Frost and Sullivan, is the allergic reaction to regular NRL catheters, and as a result, healthcare providers around the world have been willing to pay the higher premium for the silicone catheters, due solely to the allergic reactions to latex catheters and the litigation and other claims that have occurred and are feared to result from using latex.

However, with the advent of Vytex NRL, these silicone marketing advantages no longer exist. The virtually non-detectable active antigenic protein count of the Vytex NRL eliminates the greatest advantage silicone had, which was its non-allergenic nature. Since there is little to no advantage that silicone has over NRL in terms of being compatible with antimicrobial coatings, and NRL is less that one-half the cost of silicone, there would be little reason to use silicone in place of Vytex NRL. In fact, even the independent Frost & Sullivan reports indicate that a high restraint and an obstacle to growth of the silicone catheter market are the higher costs of the silicone versions. Additionally, there are certain lobbying groups that continue to push other materials instead of silicone.

In 2005 the revenue for silicone catheters and tubing in Western Europe was €50M which is estimated to translate to 34,399,120 units. The projections for 2006 and 2007 were for more than a 4% increase each year, and the projections for 2008 and 2009 include a 5.5% and 5.7% increase, respectively, with a jump in 2010 to 7%. This amounts to approximately 38 million, 40 million, and 42 million units of silicone catheters and tubing for Western Europe for each of the years 2008, 2009 and 2010, respectively. There is approximately 28 grams of NRL in each catheter unit, and the pricing of silicone catheters and tubing amount to approximately €3.0 to €8.0, or $4 to nearly $11 per pound – a significant price increase over the current pricing for NRL or for Vytex NRL. The estimates of unit usage in the U.S. for the same years of 2008, 2009 and 2010 for all types of catheters include 36 million, 38 million, and 40 million respectively.

The healthcare market in both the U.S. and Western Europe is very cost sensitive, with widespread adoption of cost-cutting, group purchasing and cost management initiatives generally. Given this highly cost-conscious nature of the healthcare markets in both the United States and Europe, it is very reasonable to predict that within a year or two after regulatory approval, Vytex NRL could capture a solid percentage of the silicone catheter market. Given these predictions, it is anticipated that catheters made with Vytex NRL could be available for sale in Western Europe towards the end of 2010, and towards the end of 2011 in the U.S.

The other measurable market share for catheters includes the thermoplastic elastomer (TPE) - made catheters, like polyurethane (TPU). Western Europe uses far more catheters made of this TPE/TPU material than does the U.S. In Western Europe the estimated projected volume in tonnes for this material for years 2008, 2009 and 2010 is between 5,000 to 6,000 tonnes.

Some of the greatest obstacles in the use of TPU for catheters include the high cost of creating a medical grade of TPE/TPU material, which in 2003 was priced between $1.70 and $3.00 per pound. As discussed with silicone above, the greatest advantage of using TPE/TPU was the non-allergenic nature of its material, which is virtually eliminated with the Vytex NRL. Due to the high cost of the manufacturing of and the negatively perceived toxic qualities of medical device-grade TPE materials, Vystar reasonably believes it will capture a greater percentage of the TPE catheter market sooner.

One of the other competing materials for catheters, PVC, has been virtually eliminated in the marketplace due to the environmental concerns, particularly those containing di-ethylhexylphthalate (DEHP) as a plasticizer. NRL was used as an alternative to PVC when these environmental issues became known.

The world wide projections of catheters already made with NRL amount to 5,125 tonnes for the year 2007. Taking a conservative average growth rate similar to the U.S. and European silicone and TPE catheter markets, the NRL catheter market would increase at an annual average of 5.5% from 2008 through 2010, resulting in NRL usage of 5,407, 5,704 and 6,018 tonnes in each of those years. At 28 grams per NRL catheter, this would translate to approximately 193 million, 203 million, and 214 million units, respectively for each of the years 2008, 2009 and 2010. Vystar reasonably predicts an even easier transition from existing NRL material to Vytex NRL. Once regulatory approvals have been received products manufactured with Vytex NRL can expect to enter the US market in late 2011.

Generally, the catheter market is viewed as “relatively saturated”, and so the need for new innovations is rather acute according to some industry experts. Despite the saturation, the market is viewed as still dynamic enough and receptive to such innovations. Given the greater ease of its entry into the medical device market in Western Europe, as compared to the United States, the EU is one of our initial target markets for promoting Vytex NRL for catheters.

Agreements with Universal Capital Management, Inc.

On January 31, 2008, the Company entered into a Management Agreement with Universal Capital Management, Inc. ("UCM"), a publicly held business development company. Pursuant to the terms of this Agreement, Vystar engaged UCM to provide management services and other assistance including strategic planning, investment banking consultation and investor introduction services, and, investor relations services. Pursuant to the terms of this Agreement, the Company issued UCM warrants to purchase 1,000,000 shares of its common stock at an exercise price of $0.01. These warrants are exercisable in whole or in part at or before January 31, 2013.

On April 30, 2008, the Company entered into an additional management and agreement with UCM pursuant to which UCM agreed to provide management services including day-to-day managerial assistance on issues such as employment, payroll, benefits, real estate leasing, utility utilization, capital expenditures, personnel and other related matters, financial reporting services, tax reporting services and accounts payable services. Pursuant to the terms of this Agreement, UCM was issued warrants to purchase 500,000 shares of the Company's common stock at an exercise price of $2.00 per share. The warrants are exercisable in whole or in part at or before April 30, 2013. In the event that the Company elects to extend the Management Agreement for an additional year term beyond the first year of the Agreement, the Company has agreed to issue additional warrants to purchase 500,000 shares of its common stock at an exercise price of $0.01 per share.

On or about __________, 2009, the Company will issue 600,000 shares of its common stock to UCM as additional compensation for services to Vystar, which shares will be distributed to the UCM stockholders as described in this prospectus.

Private Placement

Vystar completed a private placement of its common stock and warrants to purchase common stock to accredited investors in October 2008. In the offering, the Company issued 1,189,000 shares of its common stock at a price of $2.00 per share. For each two (2) shares of common stock purchased, the investor received a warrant to purchase one (1) share of our common stock at $1.00 per share for a period of two (2) years from the date of issue.

GOVERNMENT REGULATION

In the United States, healthcare products are subject to regulation by the Food and Drug Administration (FDA). Management believes that Vystar is not itself subject to regulation by the FDA due to the fact that it does not manufacture a finished medical device, but only provides Vytex NRL as a component or raw material to healthcare product manufacturers. However, there will be FDA regulation of the labeling of healthcare products that are produced with Vytex NRL. Additionally, effective September 30, 1998, FDA regulations prohibited the use of the term “hypoallergenic” on natural rubber latex gloves. In order to make any such claim, the latex product manufacturer must seek a waiver from the FDA of such regulatory prohibitions. Commentary included with the FDA’s September 1998 rule indicated that the prohibition on the use of the “hypoallergenic” label was based on the fact that, although such labeling was intended to indicate that the risk of allergic reaction to residual levels of processing chemicals was reduced, consumers interpreted the labeling to mean that the risk of allergic reactions to any component in the device would be minimal. Thus the hypoallergenic label was deemed misleading. There can be no assurance, however, that we will succeed in securing FDA approval for any claim regarding the “hypoallergenic” or reduced allergy potential of latex produced with the Vytex NRL process. Failure to secure, if required, such FDA approval, could delay or otherwise detrimentally affect our introduction to natural rubber latex healthcare products. Notwithstanding, the licensed glove manufacturer may be able to use the Vytex NRL trademark on its label to indicate only that the Vytex NRL component was used in the production of the healthcare product, and no further claim is asserted. We believe that we will be able to provide sufficient testing data to the FDA to support our claim with respect to the natural rubber latex antigenic proteins present in Vytex NRL.

MANAGEMENT

Our executive officers and directors and their respective ages and positions as of October 30, 2008, are as follows:

Name	Age	Title
William R. Doyle	51	Chairman of the Board, President and Chief Executive Officer (3)
Sandra G. Parker	54	Executive Vice President, Sales and Marketing
Matthew P. Clark	35	Vice President, Technical Services
J. Douglas Craft	45	Director (1)(2)(3)
Joseph C. Allegra, MD	59	Director (2)(3)
W. Dean Waters	43	Director (1)(2)
Mitsy M. Mangum	44	Director (1)

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Executive Committee.

Set forth below is biographical information concerning executive officers, other officers, directors and advisors:

Executive Officers

William R. Doyle, Chairman of the Board, President and Chief Executive Officer , has most recently served as Vice President of Marketing, Women’s Health for Matria Healthcare, Inc. a disease management company. Mr. Doyle spearheaded the initial branding efforts at Matria as well as held responsibility for sales development, training, public relations, and marketing. He has worked in many aspects of healthcare industry for over twenty years encompassing manufacturing, sales, marketing and advertising. In addition to Matria, he has experience with such companies as Isolyser Company, Inc., McGaw, Inc., Lederle Laboratories (now Wyeth), and in an advertising capacity for Novartis Ophthalmics. Mr. Doyle is a member of the Board of Directors of the Georgia Chapter of the March of Dimes. He holds a Bachelor of Science in Biochemistry from Penn State University and Master of Business Administration from Pepperdine University.

Sandra Parker, Executive Vice President, Sales And Marketing, brings over 25 years of extensive management experience to Vystar in business development, strategic planning, sales and marketing with the leading distribution, hospital, manufacturing, group purchasing and trade association companies in the healthcare industry. Sandra most recently served as senior manager for Kimberly-Clark Healthcare where she was the architect for their expansion into non-hospital markets. She currently serves as Chair of Professional Women in Healthcare, a national organization of women executives. She is a graduate of the Jackson School of Nursing in Miami.

Matthew P. Clark, Vice President Technical Services , is responsible for day-to-day Vystar operations as well as IP, trademark and product development. A co-patent holder on the process to reduce the allergenicity of natural rubber latex prior to vulcanization, Mr. Clark is a key company contact for latex industry leaders. He is co-author of four technical papers, “Technological and Physical Properties of a New, Low Antigenic Protein Natural Rubber Latex”, “The Business Aspects of Vytex, an Ultra Low Protein Natural Rubber Latex”, “Vytex Ô Natural Rubber Latex: A Proposed Industry Standard for the Manufacture of Commercial Natural Rubber Products”, and “Vytex Ô Natural Rubber Latex: An Innovative Source Material for Natural Rubber Products Prior to Vystar, he had supervisory roles at Isolyser and Globe Ticket and Label Company. He is a graduate of Gwinnett Technical Institute.

Other Officers

Linda S. Hammock, Acting Chief Financial Officer, has more than 25 years of experience in accounting and financial management and has spent the past 12 years providing consulting services to companies as a part-time CFO and/or controller. For the past three years, Ms. Hammock has been affiliated with Accounting Professionals Network, a provider of professional financial management to companies not requiring it on a full-time basis. Prior to that, she provided part-time CFO and/or controller services through Linda S. Hammock, CPA, as well as through Resources Connection (now Resources Global Professionals) and Callaway Partners (now Huron Consulting Group). She has served as an executive officer with companies in the health care and banking industries. Hammock holds a Master of Accountancy degree from the University of Georgia, is a Certified Public Accountant, and a member of the American Institute of CPAs and the Georgia Society of CPAs.

Dawn E. Ely, JD, General Counsel and Chief Legal Officer, has more than 17 years of healthcare and technology law experience, most of which has been as an in-house attorney simultaneously managing legal and operational divisions of small, large, public, private, venture-backed and governmental organizations. Most recently, Dawn served as the Interim General Counsel of Coloplast Corp., the regional headquarters of an international medical device company. She has also served as chief counsel imaging division, global regulatory counsel healthcare, and regional head of regulatory affairs and quality assurance organizations for Agfa and its Americas regional headquarters, serving as the global regulatory expert, strategist and legal counsel for the medical device business, which included product licensing, labeling, marketing, good manufacturing practices and privacy/security regulations. Prior to this, Dawn served as the Vice President of Legal & Administrative Affairs for a venture-backed disease management company, ProMedex, Inc. also managing the human resources department and creating the legal strategy for the company, as well as handling all legal and contractual matters. She is a dual-majored, distinguished honors major B.A. graduate of the University of Virginia, and earned her law degree at Mercer University in Macon, Ga.

Directors

J. Douglas Craft, Director , joined Vystar’s Board of Directors in October 2006. Mr. Craft is the founder and chief executive officer of Atlanta-based Medicraft Inc., one of the largest independent distributors for Medtronic Spinal Products worldwide. Mr. Craft has more than 22 years experience in the medical device arena and holds a biomedical engineering degree from Mississippi State University.

Joseph C. Allegra, MD, Director, joined Vystar’s Board of Directors in April 2008. Dr. Allegra is the founder/owner of various limited liability companies in the Atlanta area including Diamond II Investments, Oncology Molecular Imaging, and Pediatric Urgent Care. He is also the owner of Cyberlogistics, Inc and is a partner with the Seraph Group. Dr. Allegra has held various professorships and chairmanships as a practicing oncologist. He has an undergraduate degree in Chemistry from Temple University and obtained his MD from the Milton S. Hershey Medical of the Pennsylvania State University.

Mitsy Y. Mangum , Director , joined Vystar’s Board of Directors in October 2008. Ms. Mangum is Vice President-Investments, Financial Advisor WMS, RPC with Raymond James & Associates in the Atlanta area. Ms. Mangum is an accomplished investment professional with over 22 years of financial service and industry experience both from the retail side as well as the institutional side. Ms. Mangum maintains an in-depth knowledge of the financial markets, professional money management and managing portfolios. She has a Bachelor of Science in Business Administration / Management from College of Charleston.

W. Dean Waters, Director , joined Vystar’s Board of Directors in October 2008. Mr. Waters is President and Founder of Poseidon Capital Investments, LLC, specializing in investment management, futures trading and lease finance consulting in the Atlanta area. Mr. Waters has over 10 years of experience providing fiscal structuring and management expertise to foreign and domestic entities, including government, private, Fortune 1000 and utility organizations. He has a Bachelor of Science in Economics from East Carolina University and an MBA in Finance from Wake Forest University.

Advisors

Seth Goldberg, Special Advisor to the Board , is responsible for assisting Vystar in developing regulatory strategies to bring Vystex NRL to market. Goldberg has been a partner in the Washington D.C. based law firm of Steptoe & Johnson since 1985. Mr. Goldberg’s law practice focuses on chemical and environmental regulation, with principal clients including multinational companies and national trade associations. Mr. Goldberg frequently assists clients in developing regulatory strategies to bring products to market and minimize the impact of government regulation. Mr. Goldberg received a B.A. from the State University of New York in Binghamton and a J.D. from Stanford Law School.

Mark C. Swanson, Technical Advisor, is an immunochemist of 30 years working for the Mayo Foundation, Rochester, MN. He graduated in 1978 from St. Cloud State University, St. Cloud, MN with degrees in bio-medical science and chemistry. He founded Quan-Tec-Air, Inc. in 1985. The company is dedicated to the quantification of asthmagenic bio-aerosols using specialized sampling, filtration and immunoassay techniques. The combination of air sampling expertise and de novo immunoassay design and implementation makes him a unique and valuable resource for immuno-aero-biological health hazard assessment. He is contacted frequently by industry and agencies interested in evaluating workplace bio-aerosols and their remedies.

Catharine Carole Calkins Burke, Ph.D., Technical Advisor, Skilled biomedical researcher capable of analyzing experiments, data, and information; creative and resourceful in generating ideas and solving problems; recognized by colleagues, peers and professors for initiating and developing ideas within the scope of defined projects, while ensuring quality of work. Dr. Calkins holds a Ph.D. degree in Pharmacology from Wayne State University and Bachelors of Science degree in Chemistry/Biochemistry from San Jose State University.

Vystar Technical Advisory Board. The Vystar Technical Advisory Board is comprised of many leading healthcare experts involved in the ongoing development and implementation of Vytex NRL. The board members include professionals from large healthcare purchasing groups, RNs and surgeons. The board ensures that the ever-changing needs of the healthcare community are addressed.

Board Composition and Election of Directors

Our board of directors currently consists of five members. There are no family relationships among any of our directors or executive officers. In accordance with the terms of our bylaws, our board of directors is composed of one class. As a result, our entire board of directors will be elected each year at our annual meeting of shareholders.

Our bylaws provide that the authorized number of directors may be changed only by resolution of our board of directors. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled by vote of a majority of our directors then in office.

Director Independence

Under Rule 4350 of the Nasdaq Marketplace Rules, independent directors must comprise a majority of a listed company’s board of directors within one year of listing. In addition, Nasdaq Marketplace Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. While Vystar does not currently qualify for listing on Nasdaq and will likely not qualify for some time after the date of this prospectus, it does intend to seek such listing as soon as possible and will conply with its Marketplace Rules immediately. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended. Under Nasdaq Marketplace Rule 4200(a)(15), a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered to be independent for purposes of Rule 10A-3, a member of an audit committee of a public company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the public company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.

In September 2008, our board of directors undertook a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that none of Messrs. Craft or Waters, Dr. Allegra or Ms. Mangum, representing four of our five directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq Marketplace Rule 4200(a)(15). Our board of directors also determined that Messrs. Craft, Waters and Ms. Mangum, who comprise our audit committee, and Messrs. Craft and Waters, and Dr. Allegra satisfy the independence standards for those committees established by applicable SEC rules and the Nasdaq Marketplace Rules. In making this determination, our board of directors considered the relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

Board Committees

Our board of directors has established an executive committee, an audit committee and a compensation committee. Each committee will operate under a charter that will be approved by our board of directors.

Executive Committee

The members of the Executive Committee are Messrs. Doyle and Craft, and Dr. Allegra. Mr. Doyle chairs the Executive Committee.

The role of Vystar’s Executive Committee is to oversee operations of the Board and personnel matters and if necessary, to act on behalf of the Board during on-demand activities that occur between meetings (these acts are later presented for full board review). Working on behalf of the full Board of Directors, this Committee will provide an opportunity for detailed examination of current policy issues facing Vystar, develop policy recommendations for consideration by the Board, and provide general oversight for the overall direction and operations of Vystar.

Audit Committee

The members of our audit committee are Messrs. Craft and Waters, and Ms. Mangum. Mr. Waters chairs the audit committee. Our board of directors has determined that each audit committee member satisfies the requirements for financial literacy under the current requirements of the Nasdaq Marketplace Rules. Mr. Waters is an “audit committee financial expert,” as defined by SEC rules and satisfies the financial sophistication requirements of The NASDAQ Global Market. Our audit committee assists our board of directors in its oversight of our accounting and financial reporting process and the audits of our financial statements. The audit committee’s responsibilities include:

·	appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

·	overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

·	reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

·	monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;

·	discussing our risk management policies;

·	establishing policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and resolution of accounting related complaints and concerns;

·	meeting independently with our independent registered public accounting firm and management;

·	reviewing and approving or ratifying any related person transactions; and

·	preparing the audit committee report required by SEC rules.

All audit and non-audit services, other than de minimus non-audit services, to be provided to us by our independent registered public accounting firm must be approved in advance by our audit committee.

Compensation Committee

The members of our compensation committee are Messrs. Craft and Waters, and Dr. Allegra. Dr. Allegra chairs the compensation committee. The compensation committee’s responsibilities include:

·	annually reviewing and approving corporate goals and objectives relevant to chief executive officer compensation;

·	determining our chief executive officer’s compensation;

·	reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our other executive officers;

·	overseeing an evaluation of our senior executives;

·	overseeing and administering our cash and equity incentive plans;

·	reviewing and making recommendations to our board of directors with respect to director compensation;

·	reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure required by SEC rules; and

·	preparing the compensation committee report required by SEC rules.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors or our compensation committee. None of the members of our compensation committee is an officer or employee of our company, nor have they ever been an officer or employee of our company.

Code of Business Conduct and Ethics

We will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics will be available on our website at www.logmein.com. Any amendments to the code, or any waivers of its requirements, will be disclosed on our website.

Director Compensation

Since our formation, we have not paid cash compensation to any director for his service as a director. However, we have historically reimbursed our non-employee directors for reasonable travel and other expenses incurred in connection with attending board of director and committee meetings.

Our president and chief executive officer has not received any compensation in connection with his service as a director. The compensation that we pay to our president and chief executive officer is discussed in the “Executive Compensation” section of this prospectus.

The following table sets forth information regarding compensation earned by our non-employee directors during 2006-2008 for Mr. Craft, and for 2008 for Dr. Allegra. Mr. Waters and Ms. Mangum have not to date received any options or warrants to purchase shares of our common stock in connection with their service on our board of directors.

	Warrant Awards
Name	($)(1)

J. Douglas Craft (2)	$	67,927
Joseph C. Allegra, MD (3)		25,266

(1)		Represents the dollar amount of share-based compensation expense recognized for financial statement reporting purposes pursuant to SFAS 123R during 2006 through September 30, 2008, except that such amounts do not reflect an estimate of forfeitures related to service-based vesting conditions. The assumptions used by us with respect to the valuation of option grants are set forth in Note 8 to our financial statements included elsewhere in this prospectus.
(2)		Represents warrants to purchase 160,000 shares of our common stock with a weighted average exercise price of $1.07875 per share.
(3)		Represents warrants to purchase 40,000 shares of our common stock with an exercise price of $1.315 per share.

Executive Compensation

Compensation Discussion and Analysis

Overview

Our compensation committee was recently elected by our board of directors. Going forward, the compensation committee of our board of directors will oversee our executive compensation program. In this role, the compensation committee will review and approve annually all compensation decisions relating to our named executive officers. Our historical executive compensation programs were developed and implemented by our board of directors consistent with practices of other venture-backed, privately-held companies. Prior to this offering, our compensation programs, and the process by which they were developed, were less formal than that typically employed by a public company. During this time, our board of directors and compensation committee generally benchmarked our executive compensation on an informal basis by comparing our executives’ compensation to our estimates of executive compensation paid by companies in our industry and region that are also comparable to us in size, revenue, financial condition and capital investment. We refer to this group as our private company peer group. The board of directors and the compensation committee intend to continue to formalize their approach to the development and implementation of our executive compensation programs.

Objectives and Philosophy of Our Executive Compensation Programs

Our compensation committee’s primary objectives with respect to executive compensation are to:

·	attract, retain and motivate talented executives;

·	promote the achievement of key financial and strategic performance measures by linking short- and long-term cash and equity incentives to the achievement of measurable corporate and, in some cases, individual performance goals; and

·	align the incentives of our executives with the creation of value for our stockholders.

To achieve these objectives, the compensation committee will evaluate our executive compensation program with the goal of setting compensation at levels the committee believes are competitive with those of our private company peer group. In addition, our executive compensation program will tie a substantial portion of each executive’s overall compensation to key strategic, financial and operational goals such as our financial and operational performance, the growth of our customer base, new development initiatives and the establishment and maintenance of key strategic relationships. We will also provide a portion of our executive compensation in the form of stock options that vest over time, which we believe helps to retain our executives and aligns their interests with those of our shareholders by allowing them to participate in the longer term success of our company as reflected in stock price appreciation.

We compete with many other companies for executive personnel. Accordingly, the compensation committee will generally target overall compensation for executives to be competitive with that of our private company peer group. Variations to this targeted compensation may occur depending on the experience level of the individual and market factors, such as the demand for executives with similar skills and experience.

Components of Our Executive Compensation Program

The primary elements of our executive compensation program will be:

·	base salary;

·	cash incentive bonuses;

·	equity incentive awards;

·	change of control benefits; and

·	insurance, retirement and other employee benefits and compensation.

We do not have any formal or informal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation or among the different forms of non-cash compensation. Instead, our compensation committee will establish these allocations for each executive officer on an annual basis. Our compensation committee will establish cash compensation targets based primarily upon informal benchmarking data, such as comparing the compensation of our executives to companies in our private company peer group, as well as the performance of our company as a whole and of the individual executive and executive team as a whole. Our compensation committee will establish non-cash compensation based upon this informal benchmarking data, the performance of our company as a whole and of the individual executive and executive team as a whole, the executives’ equity ownership percentage and the amount of their equity ownership that is vested equity. We believe that the long-term performance of our business is improved through the grant of stock-based awards so that the interests of our executives are aligned with the creation of value for our shareholders.

Summary Compensation Table

The following table sets forth information regarding compensation earned by our chairman and chief executive officer, our former chairman and chief executive office and two other executive officer during 2005, 2006 and 2007. We refer to these executive officers (other than Mr. Honeycutt, our former chairman and chief executive officer) as our “named executive officers” elsewhere in this prospectus.

					Non-Equity
			Option		Incentive Plan		All Other
	Salary		Awards		Compensation		Compensation		Total
Name and Principal Position	($)		($)(1)		($)(2)		($)(3)		($)
William R. Doyle
Chairman and Chief Executive Officer
2007	$	168,750	$	-	$	-	$	2,422	$	171,172
2006	$	154,808	$	154,909	$	-	$	-	$	309,717
2005	$	125,000	$	33,682	$	-	$	-	$	156,682

Travis Honeycutt (4)									$
Former Chairman and Chief Executive Officer
2007	$	196,875	$	-	$	-	$	12,574		209,449
2006	$	136,859		-				9,541		146,400
2005	$	134,896						8,711		143,607

Sandra Parker (5)
Executive Vice President, Sales and Marketing
2007	$	-	$	-	$	-	$	-	$	-
2006	$	-		-		-		-		-
2005	$	-		-		-		-		-

Matthew P. Clark
Vice President, Technical Services
2007	$	75,833	$	30,388	$	-	$	16,327	$	122,549
2006	$	60,577		-		-		8,943		69,520
2005	$	28,854		-		-		5,041		33,895

(1)		Valuation of these options is based on the dollar amount of share-based compensation recognized for financial statement reporting purposes pursuant to SFAS 123R with respect to 2007, except that such amounts do not reflect an estimate of forfeitures related to service-based vesting conditions. The assumptions used by us with respect to the valuation of option grants are set forth in Note 8 to our financial statements included elsewhere in this prospectus. The individual awards reflected in this summary compensation table are further summarized below under “Grants of Plan-Based Awards in 2007.”
(2)		Consists of cash bonuses paid under our annual discretionary cash incentive bonus program for 2005, 2006 and 2007.
(3)		Amounts consist of medical, life insurance and disability insurance premiums paid by us on behalf of the named executive officer.
(4)		Mr. Honeycutt resigned as chairman and chief executive officer of Vystar in March, 2008.
(5)		Ms. Parker was not an employee in 2005, 2006 or 2007.

Employment Agreements

On November 11, 2008, Vystar entered into an Employment Agreement with William R. Doyle to continue to serve as Vystar’s President, Chief Executive Officer and Chairman of the Board of Directors. The term of the Agreement is effective until terminated by either party in accordance with the terms of the Agreement. Under the Agreement, Mr. Doyle receives a base salary of $185,000 per year, as such base salary may be adjusted by the Board of Directors, and an annual bonus equal to a maximum of 125% of Mr. Doyle’s base salary based on the success of the Company in meeting its objectives, as determined by the Board of Directors; provided, that no cash bonus is payable to Mr. Doyle on any date unless he is employed by the Company on that date. The amount of the annual bonus is determined by the Board of Directors based on the percentage of achievement of the stated company objectives. Notwithstanding, if the Company does not meet at least 90% of its stated objectives, the Board of Directors may choose not to award Mr. Doyle any portion of his annual bonus. The effective date of the annual bonus calculation is the Company’s fiscal year-end and is payable in one or more installments as determined by the Board of Directors beginning in the first quarter of the following fiscal year. Mr. Doyle’s Employment Agreement is terminable at will by the Company for cause or without cause as defined in the Agreement. However, if Mr. Doyle’s employment is terminated by Vystar without cause, Vystar is obligated to pay Mr. Doyle compensation earned through the date of termination plus a severance payment equal to six (6) months base salary from the date of termination payable as if he had remained an employee of the Company, plus, assuming Mr. Doyle complies with non-compete and non-solicitation covenants contained in the Employment Agreement, an amount equal to 75% of Mr. Doyle’s base salary amount for the one (1) year period after the date of termination. If Mr. Doyle is terminated for cause or he terminates the Employment Agreement without cause, he is only entitled to compensation accrued through the date of termination.

On April 1, 2008, Vystar entered into an Employment Agreement with Sandra Parker to serve as Vystar’s Executive Vice President Sales and Marketing. The term of the Agreement continues effective unless a party gives the other party notice of intent to not renew 90 days prior to each annual anniversary date, unless earlier terminated as described below. Under the Agreement, Ms. Parker receives a base salary of $95,000 per year plus, for the first six months of Ms. Parker’s employment, a guaranteed bonus of $5,000 per month. Thereafter, a further bonus structure may be made available to Ms. Parker depending upon the performance of Vystar and Ms. Parker, at the complete and sole discretion of the Board of Directors. Ms. Parker was granted a total of 200,000 stock options at an exercise price of $1.00 per share, 50,000 of which vested immediately upon execution of the Employment Agreement and 50,000 of which vest on each of the next three anniversaries of the Employment Agreement. Ms. Parker’s Employment Agreement is terminable at will by the Company for cause or without cause as defined in the Agreement. However, if Ms. Parker’s employment is terminated by Vystar without cause, Vystar is obligated to pay Ms. Parker compensation earned through the date of termination plus a severance payment equal to three (3) months base salary plus employee benefits from the date of termination payable as if she had remained an employee of the Company. If Ms. Parker is terminated for cause or she terminates the Employment Agreement without cause, she is only entitled to compensation through the date of termination.

No other officers of the Company are parties to Employment Agreements.

Grants of Plan-Based Awards

The following table sets forth information regarding grants of compensation in the form of plan-based awards made to our named executive officers:

		Option Awards:
		Number of Securities		Exercise or Base Price of
Name	Grant Date	Underlying Option (#)		Option Awards ($/Sh)		Option Expiration Date

William R. Doyle	12/1/04	300,000	(1)	$	1.00	12/1/2014
	4/28/05	100,000	(1)	$	1.50	4/28/2015
	10/1/06	500,000	(1)	$	1.00	10/1/2016
	2/11/08	1,750,000	(1)	$	1.00	2/11/2018
Matthew P. Clark	1/1/07	100,000	(1)	$	1.00	1/1/2017
	2/11/08	250,000	(1)	$	1.00	2/11/2018
Sandra Parker	4/1/08	200,000	(2)	$	1.00	4/1/2018

________________________

(1)

All options are currently vested.

(2)

50,000 of such options vested upon grant. The remainder vest at a rate of 50,000 on each of April 1, 2009, 2010 and 2011.

2004 Long-Term Incentive Compensation Plan

Our 2004 Long-Term Incentive Compensation Plan, as amended, which we refer to as the 2004 Plan, was adopted by our board of directors in 2004. A maximum of 4,000,000 shares of common stock were authorized for issuance under the 2004 Plan.

The 2004 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock and other stock-based awards. Our officers, employees, consultants and directors are eligible to receive awards under the 2004 Plan; however, incentive stock options may only be granted to our employees. In accordance with the terms of the 2004 Plan, our board of directors administers the 2004 Plan and, subject to any limitations in the 2004 Plan, selects the recipients of awards and determines:

·	the number of shares of common stock covered by options and the dates upon which those options become exercisable;

·	the exercise prices of options;

·	the duration of options;

·	the methods of payment of the exercise price; and

·	the number of shares of common stock subject to any restricted stock or other stock-based awards and the terms and conditions of those awards, including the conditions for repurchase, issue price and repurchase price.

Pursuant to the terms of the 2004 Plan, in the event of a change in control of our company, each outstanding option under the 2004 Plan will vest, but the holders shall have the right, assuming the holder still maintains a permissible relationship with us, immediately prior to such dissolution or liquidation, to exercise the option to the extent exercisable on the date of such dissolution or liquidation.

In the event of a merger or other reorganization event, our board of directors shall have the discretion to provide for any or all of the following: (a) the acceleration of vesting or the termination of our repurchase rights of any or all of the outstanding awards, (b) the assumption or substitution of all options by the acquitting or succeeding entity or (c) the termination of all options that remain outstanding at the time of the merger or other reorganization event.

401(k) Plan

We maintain a tax-qualified retirement plan that provides all regular employees with an opportunity to save for retirement on a tax-advantaged basis. Under our 401(k) plan, participants may elect to defer a portion of their compensation on a pre-tax basis and have it contributed to the plan subject to applicable annual Internal Revenue Code limits. Pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employee elective deferrals are fully vested at all times. The 401(k) plan allows for matching contributions to be made by us. We currently match dollar for dollar on the first three percent (3%) of compensation and $.50 on each dollar of the next two percent (2%) of compensation. As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan and all contributions are deductible by us when made.

LIMITATION OF LIABILITY AND INDEMNIFICATION

Articles of Incorporation and Bylaws

As permitted by Georgia law, provisions in our articles of incorporation and bylaws limit or eliminate the personal liability of our directors. Our articles of incorporation and bylaws limit the liability of directors to the maximum extent permitted by Georgia law. Georgia law provides that directors of a corporation will not be personally liable for monetary damages for breaches of their fiduciary duties as directors, except liability for:

·	any breach of the director’s duty of loyalty to us or our shareholders;

·	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

·	any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or

·	any transaction from which the director derived an improper personal benefit.

These limitations do not apply to liabilities arising under federal securities laws and do not affect the availability of equitable remedies, including injunctive relief or rescission. If Georgia law is amended to authorize the further elimination or limiting of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Georgia law as so amended.

As permitted by Georgia law, our articles of incorporation and bylaws also provide that:

·	we will indemnify our directors and officers to the fullest extent permitted by law;

·	we may indemnify our other employees and other agents to the same extent that we indemnify our officers and directors, unless otherwise determined by the board of directors; and

·	we will advance expenses to our directors and executive officers in connection with legal proceedings in connection with a legal proceeding to the fullest extent permitted by law.

The indemnification provisions contained in our articles of incorporation and bylaws are not exclusive.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the three years ended December 31, 2006, Vystar made payments to Reactive Energy, LLC, a company wholly-owned by Travis Honeycutt, the Company’s former CEO, for management fees and contract services including office reimbursements. At December 31, 2007, there was a balance due Reactive Energy, LLC of $36,453. During 2006 and 2005, the Company advanced cash and made payments on behalf of Climax Global Energy, Inc. (“Climax”), a company controlled by the Company’s former CEO, in the amounts of $12,795 and $242,654, respectively. At December 31, 2007, the balance due from Climax was $240,409. Climax is in a pre-revenue, research and development mode, and is in the process of raising capital through a private placement memorandum. The Company expects to be reimbursed in full for the balance, which is unsecured, but due to the uncertainty involved, management has elected to reserve at December 31, 2007, approximately $120,000 of the balance due from Climax. In August 2008, the Company entered into a Note Agreement with Climax which specified the repayment terms of the Note.

In February 2008, the Company’s former CEO surrendered 4,900,000 shares of the Company’s common stock issued to him during 2004. These shares were returned to the Company, thereby being available for reissuance and decreasing the outstanding shares of the Company by 4,900,000 shares.

In March 2008, Travis Honeycutt, Founder and CEO, retired from the Company.

PRINCIPAL SHAREHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock as of October 30, 2008 by:

·	each of our directors;

·	each of our named executive officers;

·	all of our directors and executive officers as a group; and

·	each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our voting securities.

The “Percentage of Shares Beneficially Owned” column is based on a total of 11,941,273 shares of our common stock outstanding as of November 3, 2008.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of October 30, 2008 are considered outstanding and beneficially owned by the person holding the options for the purpose of calculating the percentage ownership of that person but not for the purpose of calculating the percentage ownership of any other person. Except as otherwise noted, the persons and entities in this table have sole voting and investing power with respect to all of the shares of common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise set forth below, the address of the beneficial owner is c/o Vystar Corporation, 3235 Satellite Boulevard, Building 400, Suite 290, Duluth, Georgia 30096.

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned			Percentage of Shares Beneficially Owned

5% Stockholders:
Travis W. Honeycutt		2,497,000			20.91	%
Margaret S. Honeycutt		2,497,000			20.91	%
Universal Capital Management, Inc.		1,500,000	(1)		11.16	%
Glen Smotherman		1,000,000			8.37	%

Directors and Executive Officers
William Doyle		2,650,000	(2)		18.16	%
Matthew Clark		550,000	(3)		4.47	%
Sandra Parker		50,000	(4)		.42	%
J. Douglas Craft (5)		210,000			1.74	%
Atlanta, GA
Joseph C. Allegra, MD (6)		315,000			2.62	%
Atlanta, GA
W. Dean Waters		124,334			1.04	%
Atlanta, GA
Mitsy Y. Mangum		25,000			.21	%
Atlanta, GA
All directors and officers (as a group)		3,924,334			25.79	%

_____________

(1)	Includes warrants to acquire 1,000,000 shares of common stock at $.01 per shares and warrants to acquire 500,000 shares of common stock at $2.00 per share.

(2)	Consists of options to acquire shares of common stock at between $1.00 and $1.50 per share.

(3)	Consists of 200,000 shares of common stock owned directly and options to acquire 350,000 shares of common stock at $1.00 per share.

(4)	Consists of options to acquire shares of common stock at $1.00 per share.

(5)	Includes warrants to acquire 160,000 shares of common stock at a weighted average price of $1.07875 per share.

(6)	Includes warrants to acquire 40,000 shares of common stock at a weighted average price of $1.315 per share, and w arrants to acquire 25,000 shares of common stock at a price of $1.00 per share.

DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock and provisions of our articles of incorporation and bylaws are summaries only, and they are qualified by reference to complete versions of our articles of incorporation and bylaws, copies of which are available upon request.

Our authorized capital stock consists of 25,000,000 shares of common stock, par value $0.0001 per share, 10,000,000 shares of preferred stock, par value $0.0001 per share, all of which preferred stock is undesignated. Our board of directors may establish the rights and preferences of the preferred stock from time to time.

As of November 3, 2008, there were 11,941,273 shares of common stock issued and outstanding. As of October 30, 2008, there were 190 stockholders of record of our capital stock.

Common Stock

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders and do not have cumulative voting rights. An election of directors by our shareholders shall be determined by a plurality of the votes cast by the shareholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of our liquidation or dissolution, the holders of common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Our board of directors is authorized to issue shares of preferred stock in one or more series without shareholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. As of April 30, 2008, there are no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

Options and Warrants

As of November 3, 2008, options to purchase 3,400,000 shares of common stock and warrants to purchase 2,541,266 shares of common stock, at a weighted-average exercise price of $.94 per share were outstanding.

Shareholder Action; Special Meeting of Shareholders; Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our articles of incorporation and our bylaws provide that any action required or permitted to be taken by our shareholders at an annual meeting or special meeting of shareholders may only be taken if it is properly brought before such meeting and may not be taken by written action in lieu of a meeting. Our articles of incorporation and our bylaws also provide that, except as otherwise required by law, special meetings of the shareholders can only be called by our chairman of the board, our president or chief executive officer or our board of directors. In addition, our bylaws establish an advance notice procedure for shareholder proposals to be brought before an annual meeting of shareholders, including proposed nominations of candidates for election to the board of directors. Shareholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a shareholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the shareholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying until the next shareholder meeting shareholder actions that are favored by the holders of a majority of our outstanding voting securities. These provisions also could discourage a third party from making a tender offer for our common stock, because even if it acquired a majority of our outstanding voting stock, it would be able to take action as a shareholder, such as electing new directors or approving a merger, only at a duly called shareholders meeting and not by written consent.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be _______________.

Over-the-Counter Bulletin Board

We intend to apply for approval for our shares of common stock to be traded on the Over-the-Counter Bulletin Board under the symbol “__________.”

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this distribution and offering, there has been no market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this distribution and offering. Future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options or in the public market after this distribution and offering, or the anticipation of these sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of equity securities.

Upon the closing of this offering, we will have outstanding an aggregate of 12,541,273 shares of common stock, after giving effect to the distribution of an aggregate of 600,000 shares of common stock in the distribution of such shares to the UCM .

Rule 144

In general, under Rule 144, beginning 90 days after the date of this prospectus, a person who is not our affiliate and has not been our affiliate at any time during the preceding three months will be entitled to sell any shares of our common stock that such person has beneficially owned for at least six months, including the holding period of any prior owner other than one of our affiliates, without regard to volume limitations. Sales of our common stock by any such person would be subject to the availability of current public information about us if the shares to be sold were beneficially owned by such person for less than one year.

In general, under Rule 144, a person may sell shares of our common stock acquired pursuant to this prospectus immediately upon the distribution or purchase of such shares, without regard to volume limitations or the availability of public information about us, if the person is not our affiliate and has not been our affiliate at any time during the preceding three months.

Beginning 90 days after the date of this prospectus, our affiliates who have beneficially owned shares of our common stock for at least six months, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

·	1% of the number of shares of our common stock then outstanding, which will equal approximately 125,412 shares immediately after this offering; and

·	the average weekly trading volume in our common stock on the OTC Bulletin Board or other national securities exchange during the four calendar weeks preceding the date of filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale.

Sales under Rule 144 by our affiliates are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

In general, under Rule 701 of the Securities Act, any of our employees, consultants or advisors who purchased shares from us in connection with a qualified compensatory stock plan or other written agreement is eligible to resell these shares 90 days after the date of this prospectus in reliance on Rule 144, but without compliance with the various restrictions, including the availability of public information about us, holding period and volume limitations, contained in Rule 144.

LEGAL MATTERS

The validity of the shares of common stock offered hereby is being passed upon for us by Greenberg Traurig, LLP, Atlanta, Georgia.

EXPERTS

The financial statements as of December 31, 2007 and 2006, and for each of the two years in the period ended December 31, 2007, and the period from February 2, 2000 (date of inception) to December 31, 2007 included in this Prospectus have been audited by Tauber & Balser P.C., an independent registered public accounting firm, as stated in their report appearing herein and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. On November 1, 2008, Tauber & Balser P.C. combined with Habif, Avogeti & Wynne, LLP.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock that are being distributed and offered for resale. This prospectus, which constitutes part of the registration statement, does not include all of the information contained in the registration statement and the exhibits, schedules and amendments to the registration statement. For further information with respect to us and our common stock, we refer you to the registration statement and to the exhibits and schedules to the registration statement. Statements contained in this prospectus about the contents of any contract, agreement or other document are not necessarily complete, and, in each instance, we refer you to the copy of the contract, agreement or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You may read and copy the registration statement of which this prospectus is a part at the SEC’s public reference room, which is located at 100 F Street, N.E., Room 1580, Washington, DC 20549. You can request copies of the registration statement by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the SEC’s public reference room. In addition, the SEC maintains an Internet website, which is located at http://www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may access the registration statement of which this prospectus is a part at the SEC’s Internet website. Upon completion of this offering, we will be subject to the information reporting requirements of the Securities Exchange Act of 1934, and we will file reports, proxy statements and other information with the SEC.

This prospectus includes statistical data that were obtained from industry publications. These industry publications generally indicate that the authors of these publications have obtained information from sources believed to be reliable but do not guarantee the accuracy and completeness of their information. While we believe these industry publications to be reliable, we have not independently verified their data.

VYSTAR CORPORATION

(A Development Stage Company)

FINANCIAL STATEMENTS

F-1

TABLE OF CONTENTS

		PAGE

AUDITED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-3

BALANCE SHEETS AT DECEMBER 31, 2007 AND 2006		F-4

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007
AND 2006 AND FOR THE PERIOD FROM FEBRUARY 2, 2000 (INCEPTION)
TO DECEMBER 31, 2007		F-5

STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED
DECEMBER 31, 2007 AND 2006 AND FOR THE PERIOD FROM FEBRUARY 2, 2000
(INCEPTION) TO DECEMBER 31, 2007		F-6

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007
AND 2006 AND FOR THE PERIOD FROM FEBRUARY 2, 2000 (INCEPTION) TO
DECEMBER 31, 2007		F-7

NOTES TO FINANCIAL STATEMENTS		F-8-20

UNAUDITED FINANCIAL STATEMENTS

BALANCE SHEETS AT JUNE 30, 2008 AND DECEMBER 31, 2007		F-21

STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2008 AND 2007 AND FOR THE PERIOD FROM
FEBRUARY 2, 2000 (INCEPTION) TO JUNE 30, 2008		F-22

STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE SIX MONTHS
ENDED JUNE 30, 2008 AND 2007 AND FOR THE PERIOD FROM
FEBRUARY 2, 2000 (INCEPTION) TO JUNE 30, 2008		F-23-24

STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
JUNE 30, 2008 AND 2007 AND FOR THE PERIOD FROM FEBRUARY 2, 2000
(INCEPTION) TO JUNE 30, 2008		F-25

NOTES TO FINANCIAL STATEMENTS		F-26-35

F-2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Vystar Corporation

We have audited the accompanying balance sheets of Vystar Corporation (a development stage company) (the “Company”) as of December 31, 2007 and 2006, and the related statements of operations, stockholders’ equity, and cash flows for the years then ended and for the period from February 2, 2000 (date of inception) to December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vystar Corporation as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended and for the period from February 2, 2000 (date of inception) to December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 8 to the financial statements, the Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, effective January 1, 2006.

/s/ Tauber & Balser, P.C.

Atlanta, Georgia

September 15, 2008

F-3

VYSTAR CORPORATION

(A Development Stage Company)

BALANCE SHEETS

	December 31, 2007			December 31, 2006
ASSETS
CURRENT ASSETS
Cash	$	573,177		$	419,738
Note receivable due from related party		40,000			5,000
Prepaid expenses		23,078			10,622
Other		15,000			921
TOTAL CURRENT ASSETS		651,255			436,281

PROPERTY AND EQUIPMENT, NET		14,915			21,518

OTHER ASSETS
Note receivable due from related party, net of current
portion shown above and allowance for uncollectible amount
of $120,205 at December 31, 2007		80,204			240,409
Patents, net		42,147			31,729
Other		5,887			5,887

TOTAL ASSETS	$	794,408		$	735,824
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	16,913		$	2,217
Accounts payable - related party		36,453			36,453
Accrued expenses		150,654			222,507
TOTAL CURRENT LIABILITIES		204,020			261,177

LONG-TERM LIABILITIES		15,730			17,438

TOTAL LIABILITIES		219,750			278,615

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;
none issued and outstanding		-			-
Common stock, $0.0001 par value, 25,000,000 shares authorized;
15,148,320 and 13,760,295 shares issued and outstanding at
December 31, 2007 and 2006, respectively		1,515			1,377
Additional paid-in capital		4,699,545			3,342,600
Deficit accumulated during development stage		(4,126,402	)		(2,886,768	)
TOTAL STOCKHOLDERS' EQUITY		574,658			457,209

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	794,408		$	735,824

The accompanying notes are an integral part of these financial statements.

F-4

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF OPERATIONS

							Period From February 2,
	Year Ended			Year Ended			2000 (Inception) To
	December 31, 2007			December 31, 2006			December 31, 2007
NET SALES	$	-		$	-		$	-

COST AND EXPENSE
Research and development		427,530			304,680			1,715,550
General and administrative		712,315			767,406			2,296,852
		1,139,845			1,072,086			4,012,402

LOSS FROM OPERATIONS		(1,139,845	)		(1,072,086	)		(4,012,402	)

OTHER INCOME (EXPENSE)
Interest income		20,416			-			20,416
Provision for note receivable from related party		(120,205	)		-			(120,205	)
Loss on disposal of assets		-			(13,400	)		(13,400	)
Interest expense		-			(811	)		(811	)

NET LOSS	$	(1,239,634	)	$	(1,086,297	)	$	(4,126,402	)

Basic and Diluted Loss per Share	$	(0.09	)	$	(0.08	)

Basic and Diluted Weighted Average Number of Common
Shares Outstanding		14,495,395			13,185,270

The accompanying notes are an integral part of these financial statements.

F-5

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ EQUITY

													Deficit
													Accumulated
							Additional						During
	Number of			Common			Paid in			Subscription			Development
	Shares			Stock			Capital			Receivable			Stage			Total
Beginning Balance, 2/2/00 (Inception)		-		$	-		$	-		$	-		$	-		$	-
Common stock issued to founder of Vystar LLC		2,500,000			250			(250	)		-			-			-
Net loss		-			-			25,311			-			(25,311	)		-
Ending Balance, 12/31/00		2,500,000			250			25,061			-			(25,311	)		-

Net loss		-			-			4,808			-			(4,808	)		-
Ending Balance, 12/31/01		2,500,000			250			29,869			-			(30,119	)		-

Net loss		-			-			4,275			-			(4,275	)		-
Ending Balance, 12/31/02		2,500,000			250			34,144			-			(34,394	)		-

Common stock cancelled at merger of Vystar LLC		(2,500,000	)		(250	)		250			-			-			-
Common stock issued to founders of Vystar Corporation		2,825,000			283			3,817			(4,100	)		-			-
Net loss		-			-			-			-			-			-
Ending Balance, 12/31/03		2,825,000			283			38,211			(4,100	)		(34,394	)		-

Additional founders' shares of common stock issued		8,475,000			847			(847	)		4,100			-			4,100
Common stock issued in private placement memorandum at $1.00/share during 2004, net of issuance costs of $74,833		692,000			69			617,098			(10,000	)		-			607,167
Share-based compensation to employees vested during 2004		-			-			5,868			-			-			5,868
Net loss		-			-			-			-			(500,154	)		(500,154	)
Ending Balance, 12/31/04		11,992,000			1,199			660,330			(10,000	)		(534,548	)		116,981

Common stock issued in private placement memorandum at $1.00/share during Jan 2005, net of issuance costs of $3,900		78,000			8			74,092			10,000			-			84,100
Common stock issued in private placement memorandum at $1.50/share during 2005, net of issuance costs of $71,806 cash and $9,451 non-cash		795,674			80			1,112,173			-			-			1,112,253
Share-based compensation to employees vested during 2005		-			-			32,760			-			-			32,760
Share-based payments for services vested during 2005		-			-			50,232			-			-			50,232
Net loss		-			-			-			-			(1,265,923	)		(1,265,923	)
Ending Balance, 12/31/05		12,865,674			1,287			1,929,587			-			(1,800,471	)		130,403

Common stock issued with warrants in private placement memorandum at $1.50/share during 2006, net of
issuance costs of $82,643 cash and $8,404 non-cash		823,131			82			1,143,569			-			-			1,143,651
Common stock issued for exercise of warrants		19,000			2			9,498			-			-			9,500
Common stock issued for services rendered during June, 2006, valued at $1.00/share		7,500			1			7,499			-			-			7,500
Common stock issued for services rendered during September, 2006, valued at $1.00/share		2,500			-			2,500			-			-			2,500
Common stock issued for services rendered during October, 2006, valued at $1.00/share		6,000			1			5,999			-			-			6,000
Common stock issued for services rendered during December, 2006, valued at $1.00/share		36,490			4			36,486			-			-			36,490
Shared-based compensation to employees vested during 2006		-			-			204,659			-			-			204,659
Share-based payments for services vested during 2006		-			-			2,803			-			-			2,803
Net loss		-			-			-			-			(1,086,297	)		(1,086,297	)
Ending Balance, 12/31/06		13,760,295			1,377			3,342,600			-			(2,886,768	)		457,209

Common stock issued with warrants in private placement memorandum at $1.50/share during 2007, net of
issuance costs of $61,911 cash and $9,648 non-cash		597,501			60			824,632			-			-			824,692
Common stock issued for exercise of warrants		757,399			76			379,374			-			-			379,450
Common stock issued for services rendered during January, 2007, valued at $1.00/share		2,500			-			2,500			-			-			2,500
Common stock issued for services rendered during February, 2007, valued at $1.00/share		4,000			-			4,000			-			-			4,000
Common stock issued for services rendered during March, 2007, valued at $1.00/share		14,200			1			14,199			-			-			14,200
Common stock issued for services rendered during April, 2007, valued at $1.00/share		9,925			1			9,924			-			-			9,925
Common stock issued for services rendered during June, 2007, valued at $1.00/share		2,500			-			2,500			-			-			2,500
Shared-based compensation to employees vested during 2007		-			-			97,502			-			-			97,502
Share-based payments for services vested during 2007		-			-			22,314			-			-			22,314
Net loss		-			-			-			-			(1,239,634	)		(1,239,634	)
Ending Balance, 12/31/07		15,148,320		$	1,515		$	4,699,545			-$		$	(4,126,402	)	$	574,658

The accompanying notes are an integral part of these financial statements.

F-6

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

							Period From February 2
	Year Ended			Year Ended			2000 (Inception)
	December 31, 2007			December 31, 2006			To December 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,239,634)		$	(1,086,297)		$	(4,126,402)
Adjustment to reconcile net loss to net cash
used in operating activities
Stock-based compensation expense		152,936			259,945			501,744
Provision on related party note receivable		120,205			-			120,205
Depreciation		6,603			5,952			16,143
Amortization		2,384			2,090			5,861
Loss on disposal of assets		-			13,400			13,400
(Increase) decrease in assets
Prepaid expenses		(12,456	)		(6,807	)		(23,078	)
Other		(14,079	)		2,286			(20,888	)
Increase (decrease) in liabilities
Accounts payable		14,696			(97,795	)		16,914
Accounts payable - related party		-			31,196			36,453
Accrued expenses		(71,851	)		108,294			150,654
Other		(1,708	)		6,463			50,124

Net cash used in operating activities		(1,042,904	)		(761,273	)		(3,258,870	)

CASH FLOWS FROM INVESTING ACTIVITIES
Advances to related party - note receivable		-			(12,981	)		(257,908	)
Proceeds on related party note receivable		5,000			12,500			17,500
Cost of patents		(12,802	)		-			(48,008	)
Purchase of equipment		-			(2,028	)		(44,458	)

Net cash used in investing activities		(7,802	)		(2,509	)		(332,874	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, net of issuance costs of
$71,559, $91,047 and $322,596 for the periods ended
December 31, 2007, December 31, 2006 and from
inception to December 31, 2007, respectively		1,204,145			1,153,156			4,164,921

Net cash provided by financing activities		1,204,145			1,153,156			4,164,921

NET INCREASE IN CASH		153,439			389,374			573,177

CASH -BEGINNING OF PERIOD		419,738			30,364			-

CASH -END OF PERIOD	$	573,177		$	419,738		$	573,177

The accompanying notes are an integral part of these financial statements.

F-7

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

History and Nature of Business

Vystar Corporation (“Vystar” or the “Company”) is the creator and exclusive owner of the innovative technology to produce Vytex™ Natural Rubber Latex ("NRL"). This technology reduces antigenic protein in natural rubber latex products made with Vytex NRL to virtually undetectable levels. Vystar intends to introduce Vytex NRL, its new “low protein” natural rubber latex, throughout the worldwide marketplace that uses NRL or latex substitutes as a component of manufactured products . Natural rubber latex is used in an extensive range of products including balloons, textiles, footwear and clothing (threads), adhesives, foams, furniture, carpet, paints, coatings, protective equipment, sporting equipment, and, especially health care products such as condoms, surgical and exam gloves. The Company plans to produce Vytex™ through toll manufacturing agreements and/or licensing arrangements and intends to introduce Vytex NRL into the supply channels with aggressive, targeted marketing campaigns directed to the end users.

Vystar LLC, the predecessor to the Company, was formed February 2, 2000, as a Georgia limited liability company by Travis W. Honeycutt. The Company’s operations under the LLC entity were focused substantially on the research, development and testing of the Vytex NRL process, as well as attaining intellectual property rights. In 2003, the Company reorganized as Vystar Corporation, a Georgia Corporation, at which time all assets and liabilities of the limited liability company became assets and liabilities of Vystar Corporation, including all intellectual property rights, patents and trademarks.

Development Stage

Since inception as Vystar LLC on February 2, 2000, the Company’s activities have been devoted primarily to the development of the NRL and the raising of capital. Vystar Corporation is considered a development stage company as defined in Statement of Financial Accounting Standards No. 7.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates.

Concentration of Credit Risk

Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash and, as discussed in Note 9, an unsecured related party note receivable. Cash deposits generally are in excess of the FDIC insurance limits.

Property and Equipment

Property and equipment is stated at cost. Depreciation is provided by the use of the straight-line and accelerated methods for financial and tax reporting purposes over the estimated useful lives of the assets, generally 5 years.

F-8

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Patents

Patents are carried at cost and are being amortized on a straight-line basis over their estimated useful lives, or 20 years.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, note receivable due from related party, accounts payable and accrued expenses. The carrying values of cash, accounts payable and accrued expenses approximate fair value because of their short maturities. The Company is not able to estimate the fair value of its related party receivable because of the financial circumstances of the related party and its related party aspects.

Income Taxes

The Company follows Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statement and tax bases of assets and liabilities and for net operating loss carryforwards that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Loss Per Share

The Company follows SFAS No. 128, “Earnings Per Share,” resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2007 and 2006, common stock equivalents, including stock options and warrants, were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. Excluded from the computation of diluted loss per share were options to purchase 1,162,667 shares and 841,333 shares of common stock for 2007 and 2006, respectively, as their effect would be anti-dilutive. Warrants to purchase 627,725 shares and 792,664 shares of common stock for 2007 and 2006, respectively, were also excluded from the computation of diluted loss per share as their effect would be anti-dilutive.

Research and Development Costs

Research and development costs are expensed when incurred. Research and development costs include all costs incurred related to the research, development, and testing of the Company’s process to produce Vytex NRL.

F-9

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes . FIN 48 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes . Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. FIN 48 will be effective for the Company at the beginning of the annual period ending December 31, 2008. The provisions of FIN 48 will be applied to all tax positions under Statement No. 109 upon initial adoption. The cumulative effect of applying the provisions of this interpretation will be reported as an adjustment to the opening balance of retained earnings for that fiscal year. We are presently evaluating whether the adoption of this interpretation will have a material impact on our financial statements.

On February 15, 2007, the Financial Accounting Standards Board issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115. SFAS No. 159 permits many financial instruments and certain other items to be measured at fair value at our option. Most of the provisions in SFAS No. 159 are elective; however, the amendment to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” applies to all entities with available-for-sale and trading securities. The fair value option established by SFAS No. 159 permits the choice to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective for financial statements issued for the first fiscal year beginning after November 15, 2007. Early adoption is permitted provided that the choice is made in the first 120 days of that fiscal year and SFAS No. 157, “Fair Value Measurements” is also adopted. We are currently evaluating the impact, if any, that this new standard will have on our results of operations, financial position or cash flows.

On December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations . SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Since the standard is generally applicable only for acquisitions completed in the future, we are unable to determine the effect this standard would have on the accounting for such acquisitions.

F-10

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – OPERATIONS

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant losses and experienced negative cash flow since its inception. Further, at December 31, 2007, the deficit accumulated during the development stage amounted to approximately $4,126,000.

The Company is still in the development stage at December 31, 2007. During 2007, the Company received approximately $1,204,000, net of issuance costs, through the issuance of 597,501 shares of common stock and exercise of warrants. The Company plans to continue raising funds during 2008 through the sale of its common stock in private placements, generating sufficient liquidity to maintain operations until sustained revenue generation occurs. As of September 15, 2008, the Company has raised $1,425,000 and issued 712,500 shares of common stock through a private placement (Note 10). The Company’s product development is proceeding on schedule and management expects to initiate revenue generation no later than the first quarter of 2009. Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate equity investment to fulfill its development activities. The Company is in the process of adding qualified directors and employees to help meet their goals. Management believes the current business plan is attractive enough to investors to raise the necessary capital and this source of funds, in addition to current liquid assets, will allow the Company to continue as a going concern through 2008.

F-11

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31, 2007 and 2006:

	2007		2006

Furniture and fixtures	$	15,347	$	15,347
Equipment		15,111		15,111
		30,458		30,458
Less accumulated depreciation		15,543		8,939

	$	14,915	$	21,518

Depreciation expense for the years ended December 31, 2007 and 2006 was $6,603 and $5,952, respectively.

NOTE 4 – PATENTS

Patents represent legal and other fees associated with the registration of patents. The Company has two patents and had a third pending approval by the United States Patent and Trade Office. They are recorded net of accumulated amortization of $5,861 and $3,477 at December 31, 2007 and 2006, respectively. Amortization expense for the years ended December 31, 2007 and 2006 was $2,384 and $2,090, respectively.

NOTE 5 – COMMITMENTS

The Company is obligated under operating leases for its corporate office and office equipment expiring through December 31, 2010.

Aggregate minimum future lease payments are as follows:

Years Ending
December 31	Amount

2008	$	59,362
2009		61,068
2010		67,953

Total	$	188,383

Rent expense approximating $56,000 is included in general and administrative expenses for both of the years ended December 31, 2007 and 2006.

F-12

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 6 – INCOME TAXES

Differences between the income tax benefit for 2007 and 2006 and the amount determined by applying the statutory federal income tax rate (34%) to the loss before income taxes were as follows:

	2007			2006
Statutory rate		(34.0	)%		(34.0	)%
State income taxes, net of federal deduction		(6.0	)		(6.0	)
Valuation allowance		40.0			40.0
		-	%		-	%

Significant components of the Company’s deferred tax assets are as follows:

	2007			2006

Deferred tax assets:
Net operating loss carryforwards	$	1,368,000		$	965,000
Stock-based compensation		157,000			113,000
Other		109,000			61,000
Net deferred tax asset before valuation allowance		1,634,000			1,139,000

Valuation allowance		(1,634,000	)		(1,139,000	)
Net deferred tax asset	$	-		$	-

Deferred income taxes result from the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and for net operating loss carryforwards. A valuation allowance is provided against deferred tax assets for which it is more likely than not that the asset will not be realized. The ultimate realization of deferred tax assets is dependant upon the generation of future taxable income during the periods in which the net operating losses and temporary differences become deductible. The change in the total valuation allowance for the years ended December 31, 2007 and 2006 was an increase of $495,000 and $434,000, respectively.

As of December 31, 2007, the Company had net operating loss carryforwards of approximately $3,420,000, expiring through the year ending December 31, 2027. This amount can be used to offset future taxable income of the Company.

F-13

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 7 – STOCKHOLDERS’ EQUITY

Common Stock and Warrants

The Company’s predecessor company, Vystar LLC, issued 2,500,000 shares of its common stock at inception in February 2000 to its founder. These shares were cancelled and re-issued by Vystar Corporation at merger in December 2003. Also during 2003, Vystar Corporation issued 325,000 shares to its remaining founders for $4,100. During 2004, the Company issued an additional 8,475,000 shares to its founders in order to adjust the number of issued and outstanding shares at that time.

During the period from November 2004 through January 13, 2005, the Company issued 770,000 shares of its common stock in a private placement for proceeds of $691,267, net of issuance costs of $78,733.

The private placement memorandum was amended on December 28, 2004. Under the terms of the amendment and subsequent revisions on April 10, 2006 and September 25, 2006, the Company issued 795,674 shares in 2005 for proceeds of $1,112,253, net of issuance costs of $71,806 cash and $9,451 non-cash; 813,131 shares in 2006 for proceeds of $1,143,651, net of issuance costs of $82,643 cash and $8,404 non-cash; 597,501 shares in 2007 for proceeds of $824,692, net of issuance costs of $61,911 cash and $9,648 non-cash and 5,000 shares in 2008 for proceeds of $7,500 prior to its closing in April 2008. All of the shares issued were common stock. Terms of the memorandum included issuing warrants to purchase an aggregate of 1,308,965 shares of common stock at $.50 per share. During 2007 and 2006 755,899 shares and 19,000 shares, respectively, were purchased through the exercise of the warrants. The remaining warrants outstanding at December 31, 2007 of 449,167 expire during 2008.

During 2005 the Company issued stock purchase warrants to purchase 17,300 shares of common stock at an exercise price of $.50 in exchange for services rendered with the private placement, valued at $9,451. The warrants are exercisable until January 2010 and vested immediately.

During 2006 the Company issued stock purchase warrants to purchase 36,233 shares of common stock at exercise prices ranging from $1.00 to $1.50 per share in exchange for services rendered, valued at $11,499. The warrants are exercisable for periods ranging from 2011 to 2016 and vested immediately.

During 2006 the Company issued 52,490 shares of common stock for services rendered valued at $52,490.

During 2007 the Company issued stock purchase warrants to purchase 126,525 shares of common stock at exercise prices ranging from $.50 to $1.50 in exchange for services rendered, valued at $34,320. The warrants are exercisable for periods ranging from 2009 through 2017 and vested immediately.

During 2007 the Company issued 33,125 shares of common stock for professional services valued at $33,125.

F-14

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 8 – STOCK-BASED COMPENSATION

In December 2004 the Financial Accounting Standards Board (“FASB”) issued SFAS 123 (revised 2004), Share-Based Payment (“SFAS 123(R)”). SFAS 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees , and amends SFAS No. 95, Statement of Cash Flows . Generally, the approach in SFAS 123(R) is similar to the approach described in SFAS 123. However, SFAS 123(R) requires share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values at the date of grant. Pro forma disclosure is no longer an alternative.

On January 1, 2006, the Company adopted SFAS 123(R) using the modified prospective method as permitted under SFAS 123(R). Under this transition method, compensation cost recognized during 2006 includes compensation cost for all share-based payments granted prior to but not yet vested as of December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123. In accordance with the modified prospective method of adoption, the Company’s results of operations and financial position for prior periods have not been restated.

The Company uses the Black-Scholes option pricing model to estimate the grant-date fair value of an award granted during 2006 and 2007. The following assumptions were used:

·	Expected Dividend Yield – because the Company does not currently pay dividends, the expected dividend yield is zero;

Expected Volatility in Stock Price – because the Company is not publicly traded, the expected volatility of similar public entities (including companies engaged in the manufacture and/or distribution of medical, surgical, and healthcare supplies) was considered with expected volatility ranging from 22.07% - 39.25%;

·	Risk-free Interest Rate – reflects the average rate on a United States Treasury bond with maturity equal to the expected term of the option, ranging from 3.45 - 4.92%; and

Expected Life of Awards – because the Company is still in the development stage and has had minimal experience with the exercise of options or warrants for use in determining the expected life for each award, the simplified method was used to calculate an expected life based on the midpoint between the vesting date and the end of the contractual term of the stock award.

The Company recorded approximately $111,000 and $202,000 of stock-based compensation expense for the years ended December 31 2007 and 2006, respectively, related to employee stock options and stock warrants issued to board members. Of this, approximately $85,000 and $196,000 for the years ended December 31, 2007 and 2006, respectively, was attributable to the fair value of shares vested during those periods. As of December 31, 2007, approximately $10,061 of unrecognized compensation expense related to non-vested share-based awards remains to be recognized over a weighted average period of 1 year.

F-15

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 8 – STOCK-BASED COMPENSATION (CONTINUED)

Stock Options

During 2004, the Board of Directors of the Company adopted a stock option plan (the “Plan”) and authorized up to 4,000,000 shares to be issued under the Plan. At December 31, 2007, there were 2,000,000 shares of common stock reserved for issuance under the Plan. On February 2, 2008, the Board of Directors increased the number of shares reserved for issuance under the Plan to the 4,000,000 shares. The Plan is intended to permit stock options granted to employees to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the Plan that are not intended to qualify as Incentive Stock Options are deemed to be non-qualified options. During 2007 options for 100,000 shares were issued under the Plan.

The weighted-average assumptions used in the option pricing model for stock option grants were as follows:

	2007			2006
Expected Dividend Yield		-			-
Expected Volatility in Stock Price		23.32	%		24.44	%
Risk-Free Interest Rate		4.68	%		4.59	%
Expected Life of Stock Awards - Years		5			5
Weighted Average Fair Value at Grant Date	$	0.30		$	0.31

The following tables summarize all stock option activity of the Company for the years ended December 31, 2007 and 2006:

	Number of		Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2005		600,000	$	1.30

Granted		500,000	$	1.00

Outstanding, December 31, 2006		1,100,000	$	1.08

Granted		100,000	$	1.00

Outstanding, December 31, 2007		1,200,000	$	1.08

Exercisable, December 31, 2007		1,128,000	$	1.05

F-16

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 8 – STOCK-BASED COMPENSATION (CONTINUED)

Stock Options (continued)

	Number of		Weighted Average Remaining		Range of
	Shares		Contractual Life (Years)		Exercise Prices

Outstanding, December 31, 2005		600,000		9.10		$1.00 - $1.50

Granted		500,000		9.75		$1.00

Outstanding, December 31, 2006		1,100,000		8.85		$1.00 - $1.50

Granted		100,000		9.00		$1.00

Outstanding, December 31, 2007		1,200,000		7.94		$1.00 - $1.50

Exercisable, December 31, 2007		1,128,000		7.97		$1.00 - $1.50

Warrants

Warrants are issued to third parties as payment for services and in conjunction with the issuance of common stock. The fair value of each common stock warrant issued for services is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for warrants granted in 2007 and 2006:

	2007			2006
Expected Dividend Yield		-			-
Expected Volatility in Stock Price		23.59	%		26.17	%
Risk-Free Interest Rate		4.35	%		4.34	%
Expected Life of Awards		5			5

The following table represents the Company’s warrant activity for the years ended December 31, 2007 and 2006:

				Weighted Average
	Number of			Issuance or		Weighted Average		Weighted Average Remaining
	Warrants			Grant Date Fair Value		Exercise Price		Contractual Life (Years)

Outstanding, December 31, 2005		17,300				$	0.50		4.08

Issued in private placement		758,131		$	0.50	$	0.50
Granted		36,233		$	0.53	$	0.99
Exercised		(19,000	)			$	0.50
Expired		-

Outstanding, December 31, 2006		792,664				$	0.52		7.53

Issued in private placement		550,834		$	0.50	$	0.50
Granted		126,525		$	0.36	$	1.01
Exercised		(757,399	)			$	0.50
Expired		(84,899	)			$	0.50

Outstanding, December 31, 2007		627,725				$	1.01		7.38

Exercisable, December 31, 2007		627,725				$	1.01		7.38

F-17

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 8 – STOCK-BASED COMPENSATION (CONTINUED)

Warrants (continued)

All warrants issued were fully vested within the calendar year in which they were granted. Prior to January 1, 2006, the Company issued warrants to purchase shares of the Company’s common stock to an unrelated consultant for services rendered. The warrants were issued at an exercise price of $.50 per share, exercisable over a 5 year period and vested immediately. The fair value of the warrants was calculated as of the date of the grant utilizing the Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0, 29.93% stock volatility, 3.36% risk-free interest rate, and a 2.5 year expected life of the award. The fair value of $9,451 was recorded as a cost of raising capital when vesting occurred.

The Company issued warrants for services during 2007 at exercise prices ranging from $.50 to $1.50 per share, exercisable over periods ranging from two to ten years. All of the warrants vested immediately. The fair value of the warrants was calculated as of the date of the grant utilizing the Black-Scholes option pricing model and assumptions detailed above. The total amount of the fair value ($25,875 expense and $8,448 cost of raising capital) was recorded when vesting occurred.

During 2006 the Company issued warrants for services rendered at exercise prices ranging from $1.00 to $1.50 per share, exercisable over periods ranging from five to ten years. All of the warrants vested immediately. The fair value of the warrants was calculated as of the date of the grant utilizing the Black-Scholes option pricing model and assumptions as detailed above. The total amount of the fair value ($6,095 expense and $5,403 cost of raising capital) was recorded when vesting occurred.

NOTE 9 – RELATED PARTY TRANSACTIONS

During 2005 and 2004 rent expense in the amount of $40,000 and $12,000, respectively, was paid to the Company’s former CEO, Travis Honeycutt.

During the three years ended December 31, 2006, the Company made payments to Reactive Energy, LLC, a company wholly owned by the Company’s former CEO, for management fees and contract services, including office reimbursements. Rent for 2005 was also paid to Reactive Energy, LLC. The expenses incurred during this period were:

	2006		2005		2004

Management fees and contract services	$	-	$	455,811	$	125,633
Research & development expenses		-		-		250,000
Technical services		60,000		179,500		34,373
Office expenses		-		43,500		3,000
Rent		-		8,000		-
	$	60,000	$	686,811	$	413,006

F-18

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 9 – RELATED PARTY TRANSACTIONS (CONTINUED)

At December 31, 2007 and 2006, there was a balance due Reactive Energy, LLC of $36,453.

During 2006 and 2005, the Company advanced cash and made payments on behalf of Climax Global Energy, Inc. (“Climax”), a company controlled by the Company’s former CEO, in the amounts of $12,795 and $242,654, respectively. At December 31, 2007 and 2006, the balance due from Climax was $240,409 and $245,409, respectively. Climax is in a pre-revenue, research and development mode and is in the process of raising capital through a private placement memorandum. The Company expects to be reimbursed in full for the balance, which is unsecured, but due to the uncertainty involved, management has elected to reserve at December 31, 2007 approximately $120,000 of the balance due from Climax. As such, the Company has recorded a corresponding charge in 2007 of approximately $120,000 in its statement of operations. In August 2008, the Company entered into a note agreement with Climax which specified the repayment terms of the note (Note 10).

At December 31, 2007 and 2006, the Company has accrued back-pay to the Company’s former CEO in the amount of $54,946. In July 2008, the former CEO entered into an agreement with the Company foregoing any claims to this back-pay if the Climax receivable is not satisfied in full by December 31, 2008.

At December 31, 2007 and 2006, the Company also has accrued severance of $81,250 payable to the Company’s former CFO, Glen Smotherman. Mr. Smotherman has agreed to payment of this liability beginning at the earlier of payment in full of the Climax receivable or the Company’s achievement of specific sales goals. When payment begins, the liability will be satisfied in 24 equal monthly payments.

NOTE 10 – SUBSEQUENT EVENTS

On January 31, 2008, the Company entered into a management agreement with Universal Capital Management, Inc. ("UCM"), whereby UCM will provide management services, including assistance with strategic planning, investment banking consultation and investor introduction services, and investor relations services. Pursuant to the terms of this agreement, the Company issued UCM warrants, valued at approximately $1,491,000, to purchase 1,000,000 shares of its common stock at an exercise price of $0.01. These warrants are exercisable in whole or in part at or before January 31, 2013 and vested immediately.

During February 2008, the Company’s former CEO surrendered 4,900,000 shares of the Company’s common stock issued to him during 2004. These shares were cancelled and returned to the Company for future re-issue, eliminating the need to increase the Company’s number of authorized shares.

The Company granted share-based compensation in the form of 2,000,000 stock options and 200,000 stock options during February 2008 and April 2008, respectively, to three key employees. The shares issued during February are exercisable at $1.00 per share, expire February 2018, are valued at approximately $1,340,000 and vest immediately. The options issued during April are also exercisable at $1.00 per share, expire April 2018, are valued at approximately $147,000 and vest over a period of four years from the grant date.

F-19

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 10 – SUBSEQUENT EVENTS (CONTINUED)

On March 21, 2008, Travis Honeycutt, founding CEO, retired from the Company.

On April 30, 2008, the Company entered into an additional management agreement with UCM pursuant to which UCM agreed to provide management services, including day-to-day managerial. Pursuant to the terms of this agreement, UCM was issued warrants, valued at approximately $55,000, to purchase 500,000 shares of the Company's common stock at an exercise price of $2.00 per share. The warrants are exercisable in whole or in part at or before April 30, 2013 and vested immediately. In the event that the Company elects to extend the management agreement for an additional one year term beyond the first year of the agreement, the Company has agreed to issue additional warrants to purchase 500,000 shares of its common stock at an exercise price of $0.01 per share.

In April 2008, the Company added a director to its Board of Directors. At June 30, 2008 the Company’s two Board members received warrants, valued at approximately $16,000, to purchase 20,000 shares, each, of the Company’s common stock with an exercise price of $1.00. The warrants are exercisable in whole or in part at or before June 30, 2018 and vested immediately.

On April 11, 2008, the Company signed an agreement with Revertex (Malaysia) for the production of Vytex NRL. Revertex will be a non-exclusive, toll manufacturer for Vystar and is in full production mode to manufacture Vytex NRL commercially. Vystar ran its first production February 2, 2008 for use as samples in manufacturers’ trials.

On May 5, 2008, the Company initiated an equity raise through a private placement projected at $3,000,000 at completion, through an issuance of 1,500,000 shares of common stock and warrants to purchase an additional 750,000 shares of common stock at $1.00 per share. As of September 15, 2008 the Company has received $1,425,000 and issued 712,500 shares of common stock and warrants to purchase an additional 356,250 shares of common stock.

On August 15, 2008, the Company entered into an agreement with Climax which specified the payment terms of the note receivable discussed in Note 9. The significant terms were established as follows: (A) the note is non-interest bearing, (B) a $25,000 payment will be made on or before September 30, 2008, and (C) equal monthly payments of $5,000 will commence in October 2008. In the event that Climax attains certain financial thresholds as specified in the agreement, receives new third party equity funding exceeding $20 million on a cumulative basis or Climax is sold or completes an initial public offering, the remaining amount due shall become payable thirty days following the end of the calendar year in which the event occurred. In any event, the note shall be due and payable in full no later than January 31, 2010.

On August 15, 2008, the Company entered into an agreement with UCM whereby UCM agreed to assist the Company in registering its shares publicly, as well as provide management assistance with certain responsibilities unique to a publicly held entity. In consideration for these services, the Company has agreed to issue 600,000 shares of its common stock, contingent upon the Company’s registration statement becoming effective, on or about the effective date of the registration statement. These shares have been initially valued at $978,000, which will be recognized ratably as an expense over a service period estimated to continue through February 2009.

F-20

VYSTAR CORPORATION

(A Development Stage Company)

BALANCE SHEETS

	June 30, 2008			December 31, 2007
	(unaudited)
ASSETS

CURRENT ASSETS
Cash	$	798,983		$	573,177
Short-term investment		500,000			-
Note receivable due from related party		72,460			40,000
Prepaid expenses		101,157			23,078
Other		15,000			15,000
TOTAL CURRENT ASSETS		1,487,600			651,255

PROPERTY AND EQUIPMENT, NET		19,650			14,915

OTHER ASSETS
Note receivable due from related party, net of current
portion shown above and allowance for uncollectible amount
of $120,205 at June 30, 2008 and December 31, 2007		47,744			80,204
Patents, net		56,467			42,147
Other		5,887			5,887

TOTAL ASSETS	$	1,617,348		$	794,408

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable	$	86,629		$	16,913
Accounts payable - related party		36,453			36,453
Accrued expenses		192,229			150,654
TOTAL CURRENT LIABILITIES		315,311			204,020

LONG-TERM LIABILITIES		14,466			15,730

TOTAL LIABILITIES		329,777			219,750

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;
none issued and outstanding		-			-
Common stock, $0.0001 par value, 25,000,000 shares authorized;
11,291,274 and 15,148,320 shares issued and outstanding at
June 30, 2008 and December 31, 2007, respectively		1,129			1,515
Additional paid-in capital		8,972,557			4,699,545
Stock subscription receivable		(20,500	)		-
Deferred compensation		(45,958	)		-
Deficit accumulated during development stage		(7,619,657	)		(4,126,402	)
TOTAL STOCKHOLDERS' EQUITY		1,287,571			574,658

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,617,348		$	794,408

The accompanying notes are an integral part of these financial statements.

F-21

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

													Period from February
	Three Months Ended						Six Months Ended						2, 2000 (Inception) to
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007			June 30, 2008

NET SALES	$	-		$	-		$	-		$	-		$	-

COST AND EXPENSE
Research and development		63,561			108,512			290,615			237,665			2,006,165
General and administrative		847,959			217,044			3,208,884			379,342			5,505,736
		911,520			325,556			3,499,499			617,007			7,511,901

LOSS FROM OPERATIONS		(911,520	)		(325,556	)		(3,499,499	)		(617,007	)		(7,511,901	)

OTHER INCOME (EXPENSE)
Interest income		2,839			6,600			6,297			7,161			26,713
Reserve, note receivable from related party		-			-			-			-			(120,205	)
Realized (loss) on disposal of assets		-			-			-			-			(13,400	)
Interest expense		-			-			-			-			(811	)
Other expense		(53	)		-			(53	)		-			(53	)

NET LOSS	$	(908,734	)	$	(318,956	)	$	(3,493,255	)	$	(609,846	)	$	(7,619,657	)

Basic and Diluted Loss per Share	$	(0.08	)	$	(0.02	)	$	(0.31	)	$	(0.04	)

Basic and Diluted Weighted Average Number of Common Shares Outstanding		10,854,300			14,369,300			11,422,106			14,114,072

The accompanying notes are an integral part of these financial statements.

F-22

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ EQUITY

	Number of Shares			Common Stock			Additional Paid in Capital			Subscription Receivable			Deferred Charges		Deficit Accumulated During Development Stage			Total
Beginning Balance, 2/2/00 (Inception)		-		$	-		$	-		$	-		$	-	$	-		$	-
Common stock issued to founder of Vystar LLC		2,500,000			250			(250	)		-			-		-			-
Net loss		-			-			25,311			-			-		(25,311	)		-
Ending Balance, 12/31/00		2,500,000			250			25,061			-			-		(25,311	)		-

Net loss		-			-			4,808			-			-		(4,808	)		-
Ending Balance, 12/31/01		2,500,000			250			29,869			-			-		(30,119	)		-

Net loss		-			-			4,275			-			-		(4,275	)		-
Ending Balance, 12/31/02		2,500,000			250			34,144			-			-		(34,394	)		-

Common stock cancelled at merger of Vystar LLC		(2,500,000	)		(250	)		250			-			-		-			-
Common stock issued to founders of Vystar Corporation		2,825,000			283			3,817			(4,100	)		-		-			-
Net loss		-			-			-			-			-		-			-
Ending Balance, 12/31/03		2,825,000			283			38,211			(4,100	)		-		(34,394	)		-

Additional founders' shares of common stock issued		8,475,000			847			(847	)		4,100			-		-			4,100
Common stock issued in private placement memorandum at $1.00/share during 2004, net of issuance costs of $74,833		692,000			69			617,098			(10,000	)		-		-			607,167
Share-based compensation to employees vested during 2004		-			-			5,868			-			-		-			5,868
Net loss		-			-			-			-			-		(500,154	)		(500,154	)
Ending Balance, 12/31/04		11,992,000			1,199			660,330			(10,000	)		-		(534,548	)		116,981

Common stock issued in private placement memorandum at $1.00/share during Jan 2005, net of issuance costs of $3,900		78,000			8			74,092			10,000			-		-			84,100
Common stock issued in private placement memorandum at $1.50/share during 2005, net of issuance costs of $71,806 cash and $9,451 non-cash		795,674			80			1,112,173			-			-		-			1,112,253
Share-based compensation to employees vested during 2005		-			-			32,760			-			-		-			32,760
Share-based payments for services vested during 2005		-			-			50,232			-			-		-			50,232
Net loss		-			-			-			-			-		(1,265,923	)		(1,265,923	)
Ending Balance, 12/31/05		12,865,674			1,287			1,929,587			-			-		(1,800,471	)		130,403

Common stock issued with warrants in private placement memorandum at $1.50/share during 2006, net of issuance costs of $82,643 cash and $8,404 non-cash		823,131			82			1,143,569			-			-		-			1,143,651
Common stock issued for exercise of warrants		19,000			2			9,498			-			-		-			9,500
Common stock issued for services rendered during June, 2006, valued at $1.00/share		7,500			1			7,499			-			-		-			7,500
Common stock issued for services rendered during September, 2006, valued at $1.00/share		2,500			-			2,500			-			-		-			2,500
Common stock issued for services rendered during October, 2006, valued at $1.00/share		6,000			1			5,999			-			-		-			6,000
Common stock issued for services rendered during December, 2006, valued at $1.00/share		36,490			4			36,486			-			-		-			36,490
Shared-based compensation to employees vested during 2006		-			-			204,659			-			-		-			204,659
Share-based payments for services vested during 2006		-			-			2,803			-			-		-			2,803
Net loss		-			-			-			-			-		(1,086,297	)		(1,086,297	)
Ending Balance, 12/31/06		13,760,295		$	1,377		$	3,342,600		$	-		$	-	$	(2,886,768	)	$	457,209

The accompanying notes are an integral part of these financial statements.

F-23

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ EQUITY

	Number of Shares			Common Stock			Additional Paid in Capital		Subscription Receivable			Deferred Compensation			Deficit Accumulated during Development Stage			Total

Ending Balance, 12/31/06		13,760,295		$	1,377		$	3,342,600	$	-		$	-		$	(2,886,768	)	$	457,209
Common stock issued with warrants in private placement memorandum at $1.50/share during 2007, net of issuance costs of $61,911 cash and $9,648 non-cash		597,501			60			824,632		-			-			-			824,692
Common stock issued for exercise of warrants		757,399			76			379,374		-			-			-			379,450
Common stock issued for services rendered during January, 2007, valued at $1.00/share		2,500			-			2,500		-			-			-			2,500
Common stock issued for services rendered during February, 2007, valued at $1.00/share		4,000			-			4,000		-			-			-			4,000
Common stock issued for services rendered during March, 2007, valued at $1.00/share		14,200			1			14,199		-			-			-			14,200
Common stock issued for services rendered during April, 2007, valued at $1.00/share		9,925			1			9,924		-			-			-			9,925
Common stock issued for services rendered during June, 2007, valued at $1.00/share		2,500			-			2,500		-			-			-			2,500
Shared-based compensation to employees vested during 2007		-			-			97,502		-			-			-			97,502
Share-based payments for services vested during 2007		-			-			22,314		-			-			-			22,314
Net loss		-			-			-		-			-			(1,239,634	)		(1,239,634	)
Ending Balance, December 31, 2007		15,148,320			1,515			4,699,545		-			-			(4,126,402	)		574,658

Common stock issued in private placement memorandum at $1.50/share during 2008, net of issuance costs of $375 cash		5,000			-			7,125		-			-			-			7,125
Contribution of founder's stock		(4,900,000	)		(490	)		490		-			-			-			-
Common stock issued for services during 2008, net of issuance costs of $4,080 non-cash		68,787			7			64,700		-			-			-			64,707
Common stock issued in private placement memorandum at $2.00/share during 2008, net of issuance costs of $107,173		545,000			55			982,772		(20,000	)		-			-			962,827
Common stock issued for exercise of warrants during 2008, net of issuance costs of $7,317 cash		424,167			42			205,224		(500	)		-			-			204,766
Shared-based compensation to employees vested during 2008		-			-			1,467,006		-			-			-			1,467,006
Share-based payments for services vested during 2008, net of issuance costs of $21,916 non-cash		-			-			1,545,695		-			(1,545,695	)		-			-
Amortization of deferred compensation during 2008		-			-			-		-			1,499,737			-			1,499,737
Net loss		-			-			-		-			-			(3,493,255	)		(3,493,255	)
Ending Balance, June 30, 2008 (unaudited)		11,291,274		$	1,129$		$	8,972,557	$	(20,500	)	$	(45,958	)	$	(7,619,657	)	$	1,287,571

The accompanying notes are an integral part of these financial statements.

F-24

VYSTAR CORPORATION

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

							Period From February 2,
	Six Months Ended						2000 (Inception)
	June 30, 2008			June 30, 2007			To June 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,493,255	)	$	(609,846	)	$	(7,619,657	)
Adjustment to reconcile net loss to net cash
used in operating activities
Stock-based compensation expense		1,557,709			115,591			2,059,453
Provision on related party note receivable		-			-			120,205
Amortization of deferred compensation		1,499,737			-			1,499,737
Depreciation		3,585			3,315			19,717
Amortization		1,502			1,192			7,363
Loss on disposal of assets		-			-			13,411
(Increase) decrease in assets
Prepaid expenses		(78,079	)		(25,649	)		(101,158	)
Other		-			(24,079	)		(20,887	)
Increase (decrease) in liabilities
Accounts payable		69,715			4,354			86,629
Accounts payable -related party		-			-			36,453
Accrued expenses		41,576			(60,713	)		192,230
Other		(1,264	)		1,008			48,860

Net cash used in operating activities		(398,774	)		(594,827	)		(3,657,644	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investment		(500,000	)		-			(500,000	)
Advances to related party - note receivable		-			-			(257,908	)
Proceeds on related party note receivable		-			5,000			17,500
Cost of patents		(15,822	)		-			(63,830	)
Purchase of equipment		(8,320	)		-			(52,778	)

Net cash (used in) provided by investing activities		(524,142	)		5,000			(857,016	)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, net of issuance costs of
$140,861, $55,135 and $463,457 for the six months
ended June 30, 2008, June 30, 2007 and from inception
to June 30, 2008, respectively		1,148,722			905,148			5,313,643

Net cash provided by financing activities		1,148,722			905,148			5,313,643

NET INCREASE IN CASH AND CASH EQUIVALENTS		225,806			315,321			798,983

CASH - BEGINNING OF PERIOD		573,177			419,738			-

CASH -END OF PERIOD	$	798,983		$	735,059		$	798,983

The accompanying notes are an integral part of these financial statements.

F-25

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 1- BUSINESS AND BASIS OF PRESENTATION

History and Nature of Business

Vystar Corporation (“Vystar” or the “Company”) is the creator and exclusive owner of the innovative technology to produce Vytex™ Natural Rubber Latex ("NRL"). This technology reduces antigenic protein in natural rubber latex products made with Vytex NRL to virtually undetectable levels. Vystar intends to introduce Vytex NRL, its new “low protein” natural rubber latex, throughout the worldwide marketplace that uses NRL or latex substitutes as a component of manufactured products. Natural rubber latex is used in an extensive range of products including balloons, textiles, footwear and clothing (threads), adhesives, foams, furniture, carpet, paints, coatings, protective equipment, sporting equipment, and, especially health care products such as condoms, surgical and exam gloves. The Company plans to produce Vytex™ through toll manufacturing agreements and intends to introduce Vytex NRL into the supply channels with aggressive, targeted marketing campaigns directed to the end users.

Vystar LLC, the predecessor to the Company, was formed February 2, 2000, as a Georgia limited liability company by Travis W. Honeycutt. The Company’s operations under the LLC entity were focused substantially on the research, development and testing of the Vytex NRL process, as well as attaining intellectual property rights. In 2003, the Company reorganized as Vystar Corporation, a Georgia Corporation, at which time all assets and liabilities of the limited liability company became assets and liabilities of Vystar Corporation, including all intellectual property rights, patents and trademarks.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) for interim financial information. Accordingly, certain information and footnotes required by GAAP for complete financial statements may be condensed or omitted. These interim financial statements should be read in conjunction with our audited financial statements and notes thereto included in this Form S-1. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future, actual results could differ from these estimates.

Loss Per Share

The Company follows SFAS No. 128, “Earnings Per Share,” resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss in 2008 and 2007, common stock equivalents, including stock options and warrants, were anti-dilutive; therefore, the amounts reported for basic and dilutive loss per share were the same. Excluded from the computation of diluted loss per share were options to purchase 3,225,000 shares and 1,162,667 shares of common stock for 2008 and 2007, respectively, as their effect would be anti-dilutive. Warrants to purchase 2,177,834 shares and 627,725 shares of common stock for 2008 and 2007, respectively, were also excluded from the computation of diluted loss per share as their effect would be anti-dilutive.

Investments

Investments, consisting of a certificate of deposit, are recorded at market value.

F-26

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements . SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value and the expanded disclosures about fair value measurement. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS 157 for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until January 1, 2009. The Company adopted SFAS 157 on January 1, 2008 for all financial assets and liabilities, but the implementation did not require additional disclosures or have a significant impact on the Company's financial statements. The Company has not yet determined the impact the implementation of SFAS 157 will have on the Company’s non-financial assets and liabilities which are not recognized or disclosed on a recurring basis. However, the Company does not anticipate that the full adoption of SFAS 157 will significantly impact their consolidated financial statements.

On February 15, 2007, the Financial Accounting Standards Board issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115”. SFAS No. 159 permits many financial instruments and certain other items to be measured at fair value at our option. Most of the provisions in SFAS No. 159 are elective; however, the amendment to SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” applies to all entities with available-for-sale and trading securities. The fair value option established by SFAS No. 159 permits the choice to measure eligible items at fair value at specified election dates. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. The Company has adopted SFAS 159 on January 1, 2008 and has elected not to measure any additional financial assets, liabilities or other items at fair value.

F-27

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Pronouncements (Continued)

On December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations. SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Since the standard is generally applicable only for acquisitions completed in the future, we are unable to determine the effect this standard would have on the accounting for such acquisitions.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51 (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective for the Company beginning January 1, 2009. This statement is not currently applicable since it has no majority-owned subsidiaries.

NOTE 2 – OPERATIONS

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant losses and experienced negative cash flow since its inception. Further, at June 30, 2008, the deficit accumulated during the development stage amounted to approximately $7,695,000.

The Company is still in the development stage at June 30, 2008 and for the 6 months ended as of that date, has received approximately $1,175,000, net of issuance costs, through the issuance of 974,167 shares of common stock and exercise of warrants. The Company plans to continue raising funds during 2008 through the sale of its common stock in private placements, generating sufficient liquidity to maintain operations until sustained revenue generation occurs. As of October 31, 2008, the Company has raised $2,378,000 and issued 1,189,000 shares of common stock through a private placement (Note 7). The Company’s product development is proceeding on schedule and management expects to initiate revenue generation no later than the first quarter of 2009. Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate equity investment to fulfill its development activities. The Company is in the process of adding qualified directors and employees to help meet their goals. Management believes the current business plan is attractive enough to investors to raise the necessary capital and this source of funds, in addition to current liquid assets, will allow the Company to continue as a going concern through June 30, 2009.

F-28

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 3 – DEFERRED COMPENSATION

Deferred compensation represents the unamortized fair value of the issuance of warrants for future services to non-employees which was accounted for in accordance with Emerging Issue Task Force No. 96-18, Accounting for Equity Instruments That Are Issued To Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, as follows:

	June 30, 2008

Warrants	$	1,545,695
Less: accumulated amortization		1,499,737
	$	45,958

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

	June 30, 2008			December 31, 2007

Furniture & fixtures	$	15,347		$	15,347
Equipment		23,431			15,111
		38,778			30,458
Accumulated depreciation		(19,128	)		(15,543	)

	$	19,650		$	14,915

Depreciation expense for the three months ended June 30, 2008 and 2007 was $1,867 and $1,644, respectively, and for the six months ended June 30, 2008 and 2007, was $3,585 and $3,315, respectively.

NOTE 5 – PATENTS

Patents represent legal and other fees associated with the registration of patents. The Company has two patents and a third pending approval by the United States Patent and Trade Office. They are recorded net of accumulated amortization of $7,363 and $5,861 at June 30, 2008 and December 31, 2007, respectively. Amortization expense for the three months ended June 30, 2008 and 2007 was $740 and $596, respectively, and for the six months ended June 30, 2008 and 2007 was $1,502 and $1,192, respectively.

F-29

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 6 – INCOME TAXES

There is no income tax benefit recorded for the losses for the six months ended June 30, 2008 and 2007 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of the net deferred tax asset.

NOTE 7 – STOCKHOLDERS’ EQUITY

Common Stock and Warrants

During the period from November 2004 through January 13, 2005, the Company issued 770,000 shares of its common stock in a private placement for proceeds of $691,267, net of issuance costs of $78,733.

During 2006 the Company issued 52,490 shares of common stock for services rendered valued at $52,490.

F-30

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 7 – STOCKHOLDERS’ EQUITY (CONTINUED)

Common Stock and Warrants (Continued)

During 2007 the Company issued 33,125 shares of common stock for professional services valued at $33,125.

During 2008 the Company issued stock purchase warrants to purchase 1,727,776 shares of common stock at exercise prices ranging from $.01 to $2.00 in exchange for services rendered, valued at $1,673,556. The warrants are exercisable for periods ranging form 2012 through 2018 and vested immediately.

During 2008 the Company issued 68,787 shares of common stock for professional services valued at $68,787.

On May 5, 2008, the Company initiated an equity raise through a private placement projected at $3,000,000 at completion, through an issuance of 1,500,000 shares of common stock and warrants to purchase an additional 750,000 shares of common stock at $1.00 per share. As of October 31, 2008 the Company has received $2,378,000 and issued 1,189,000 shares of common stock and warrants to purchase an additional 594,500 shares of common stock.

NOTE 8 – STOCK-BASED COMPENSATION

The Company uses the Black-Scholes option pricing model to estimate the grant-date fair value of an award granted during 2008 and 2007. The following assumptions were used:

·	Expected Dividend Yield – because the Company does not currently pay dividends, the expected dividend yield is zero;

·	Risk-free Interest Rate – reflects the average rate on a United States Treasury bond with maturity equal to the expected term of the option, ranging from 2.67 – 4.92%; and

F-31

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 8 – STOCK-BASED COMPENSATION (CONTINUED)

The Company recorded stock-based compensation expense of approximately $89,000 and $22,000 for the three-month periods ended June 30, 2008 and 2007, respectively, and $1,467,000 and $76,000 for the six-month periods ended June 30, 2008 and 2007, respectively, related to employee stock options and stock warrants issued to board members. Of this, approximately $1,361,000 and $62,000 for the six months ended June 30, 2008 and 2007, respectively, was attributable to the fair value of shares vested during those periods. As of June 30, 2008, approximately $1,549 of unrecognized compensation expense related to non-vested share-based awards remains to be recognized over a weighted average period of less than 1 year.

Stock Options

The weighted-average assumptions used in the option pricing model for stock option grants were as follows for the six months ended June 30:

	2008			2007
Expected Dividend Yield		-			-
Expected Volatility in Stock Price		23.48	%		23.32	%
Risk-Free Interest Rate		2.67	%		4.68	%
Expected Life of Stock Awards - Years		5.1			5
Weighted Average Fair Value at Grant Date	$	0.71		$	0.30

The following table summarizes all stock option activity of the Company for the six months ended June 30, 2008:

	Number of		Weighted Average		Weighted Average
	Options		Exercise Price		Grant-date Fair Value

Outstanding, December 31, 2007		1,200,000	$	1.08

Granted		2,100,000	$	1.00	$	0.71

Outstanding, June 30, 2008		3,300,000	$	1.03

Exercisable, June 30, 2008		3,225,000	$	1.03

F-32

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 8 – STOCK-BASED COMPENSATION (CONTINUED)

Warrants

	2008			2007
Expected Dividend Yield		-			-
Expected Volatility in Stock Price		21.52	%		23.59	%
Risk-Free Interest Rate		2.17	%		3.02	%
Expected Life of Awards, Years		5			5

The following table represents the Company’s warrant activity for the period ended June 30, 2008:

				Weighted Average
	Number of			Issuance or		Weighted Average
	Warrants			Grant Date Fair Value		Exercise Price

Outstanding, December 31, 2007		627,725				$	1.01

Issued in private placement		272,500		$	1.00	$	1.00
Granted		1,727,776		$	0.97	$	0.74
Exercised		(424,167	)			$	0.50
Expired		(26,000	)			$	0.50

Outstanding, June 30, 2008		2,177,834				$	0.76

Exercisable, June 30, 2008		2,177,834				$	0.76

The Company issued warrants for services during 2008 at exercise prices ranging from $.01 to $2.00 per share, exercisable over periods ranging from three to ten years. All of the warrants vested immediately. The fair value of the warrants was calculated as of the date of the grant utilizing the Black-Scholes option pricing model and assumptions detailed above.

F-33

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 9 – RELATED PARTY TRANSACTIONS

On January 31, 2008, the Company entered into a management agreement with Universal Capital Management, Inc. ("UCM"), whereby UCM will provide management services, including assistance with strategic planning, investment banking consultation and investor introduction services, and investor relations services for a period of three months, expiring April 30, 2008. Pursuant to the terms of this agreement, the Company issued UCM warrants, valued at approximately $1,491,000, to purchase 1,000,000 shares of its common stock at an exercise price of $0.01. These warrants are exercisable in whole or in part at or before January 31, 2013 and vested immediately.

On March 21, 2008, Travis Honeycutt, founding CEO, retired from the Company.

On April 30, 2008, the Company entered into an additional management agreement for a period of one year with UCM pursuant to which UCM agreed to provide management services, including day-to-day managerial. Pursuant to the terms of this agreement, UCM was issued warrants, valued at approximately $55,000, to purchase 500,000 shares of the Company's common stock at an exercise price of $2.00 per share. The warrants are exercisable in whole or in part at or before April 30, 2013 and vested immediately. In the event that the Company elects to extend the management agreement for an additional one year term beyond the first year of the agreement, the Company has agreed to issue additional warrants to purchase 500,000 shares of its common stock at an exercise price of $0.01 per share.

During 2006 and 2005, the Company advanced cash and made payments on behalf of Climax Global Energy, Inc. (“Climax”), a company controlled by the Company’s former CEO, in the amounts of $12,795 and $242,654, respectively. At December 31, 2007 and 2006, the balance due from Climax was $240,409 and $245,409, respectively. Climax is in a pre-revenue, research and development mode and is in the process of raising capital through a private placement memorandum. The Company expects to be reimbursed in full for the balance, which is unsecured, but due to the uncertainty involved, management elected to reserve at December 31, 2007 approximately $120,000 of the balance due from Climax. As such, the Company recorded a corresponding charge in 2007 of approximately $120,000 in its statement of operations. In August 2008, the Company entered into a note agreement with Climax which specified the repayment terms of the note (Note 10).

F-34

VYSTAR CORPORATION

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

JUNE 30, 2008 AND 2007

NOTE 10 – SUBSEQUENT EVENTS

On August 15, 2008, the Company entered into an agreement with Climax Global Energy (“Climax”) which specified the payment terms of the note receivable discussed in Note 9. The significant terms were established as follows: (A) the note is non-interest bearing, (B) a $25,000 payment will be made on or before September 30, 2008, and (C) equal monthly payments of $5,000 will commence in October 2008. In the event that Climax attains certain financial thresholds as specified in the agreement, receives new third party equity funding exceeding $20 million on a cumulative basis or Climax is sold or completes an initial public offering, the remaining amount due shall become payable thirty days following the end of the calendar year in which the event occurred. In any event, the note shall be due and payable in full no later than January 31, 2010.

As previously discussed in Note 7, for the period July 1, 2008 through October 31, 2008, the Company has received $1,288,000 and issued 644,000 shares of common stock and warrants to purchase an additional 322,000 shares of common stock through a private placement initiated on May 5, 2008.

F-35

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table indicates the expenses to be incurred in connection with the distribution and resale offering described in this Registration Statement, other than underwriting discounts and commissions, all of which will be paid by the Registrant. All amounts are estimated except the Securities and Exchange Commission registration fee and the Financial Industry Regulatory Authority fee.

	Amount

Securities and Exchange Commission registration fee	$	86
Financial Industry Regulatory Authority fee			*
NASDAQ listing fee			*
Accountants’ fees and expenses			*
Legal fees and expenses			*
Blue Sky fees and expenses			*
Transfer Agent’s fees and expenses			*
Printing and engraving expenses			*
Miscellaneous			*
Total Expenses	$		*

*To be filed by amendment.

Item 14. Indemnification of Directors and Officers.

any breach of the director’s duty of loyalty to us or our shareholders;

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or

any transaction from which the director derived an improper personal benefit.

II-1

As permitted by Georgia law, our articles of incorporation and bylaws also provide that:

we will indemnify our directors and officers to the fullest extent permitted by law;

we may indemnify our other employees and other agents to the same extent that we indemnify our officers and directors, unless otherwise determined by the board of directors; and

we will advance expenses to our directors and executive officers in connection with legal proceedings in connection with a legal proceeding to the fullest extent permitted by law.

The indemnification provisions contained in our articles of incorporation and bylaws are not exclusive.

The Registrant maintains a general liability insurance policy which covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

Item 15. Recent Sales of Unregistered Securities.

Set forth below is information regarding shares of common stock, warrants and options to purchase common stock issued by the Registrant within the past three years that were not registered under the Securities Act of 1933, as amended, the Securities Act. Also included is the consideration, if any, received by the Registrant for such shares, warrants and options and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

(a) Common Stock and Warrant Financings

From December 2005 through July 2007, the Registrant issued 1,430,632 shares of its common stock at a price of $1.50 per share. In connection with such offering, the Registrant issued one warrant to purchase one share of common stock at an exercise price of $.50 per share for each share of common stock purchased. From October 2006 through May 2008, the Registrant issued 1,198,066 shares of common stock upon the exercise of such warrants (and warrants issued prior to December 2005) at $.50 per share.

From May 2008 through October 2008, the Registrant issued 1,189,000 shares of its common stock at a price of $2.00 per share. In connection with such offering, the Registrant issued one warrant to purchase one share of common stock at an exercise price of $1.00 per share for each two shares of common stock purchased. In September 2008, the Registrant issued 5,000 shares of common stock upon the exercise of such warrants at $1.00 per share.

From June 2006 through May 2008, the Registrant issued 154.402 shares of its common stock for services rendered to the Registrant.

II-2

(b) Stock Option Grants

Since November 2005, the Registrant has issued options to certain employees and consultants to purchase an aggregate of 2,800,00 shares of common stock at exercise prices from $1.00 to $1.50. Through the date hereof, none of such options have been exercised.

(c) Application of Securities Laws and Other Matters

No underwriters were involved in the foregoing sales of securities. The securities described in section (a) of this Item 15 were issued to investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act and Regulation D promulgated thereunder, as applicable, relative to sales by an issuer not involving any public offering, to the extent an exemption from such registration was required.

The issuance of stock options as described in section (b) of this Item 15 were issued pursuant to written compensatory plans or arrangements with the Registrant’s employees, directors and consultants, in reliance on the exemption provided by Rule 701 promulgated under the Securities Act. All recipients either received adequate information about the Registrant or had access, through employment or other relationships, to such information.

All of the foregoing securities are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of common stock, warrants and options described in this Item 15 included appropriate legends setting forth that the securities had not been registered and the applicable restrictions on transfer.

Item 16. Exhibits.

The exhibits to the Registration Statement are listed in the Exhibit Index attached hereto and incorporated by reference herein.

Item 17. Undertakings.

(a) The undersigned registrant hereby undertakes:

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

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

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and

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

II-3

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

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

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Duluth, State of Georgia, on this 13th day of November, 2008.

		Vystar Corporation
	By:	/s/ William R. Doyle
		William R. Doyle
		Chairman, President and Chief Executive Officer

Each person whose signature appears below constitutes and appoints William R. Doyle his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post effective amendments) to this Registration Statement on Form S-1, and to sign any registration statement for the same offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all post effective amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Signature	Title	Date

/s/ WILLIAM R. DOYLE	Chairman, President, Chief Executive Officer and Director (Principal Executive Officer)	November 13, 2008
/s/ LINDA S. HAMMOCK	Chief Financial Officer (Principal Financial and Accounting Officer)	November 13, 2008
/s/ J. DOUGLAS CRAFT	Director	November 13, 2008
/s/ JOSEPH C. ALLEGRA	Director	November 13, 2008
/s/ MITSY Y. MANGUM	Director	November 13, 2008
/s/ W. DEAN WATERS	Director	November 13, 2008

II-4

Exhibit Index

Exhibit Number	Description
3.1	Articles of Incorporation of Vystar Acquisition Corporation (now named Vystar Corporation) dated December 17, 2003 (as amended)

3.2	Bylaws of Vystar Corporation

4.1*	Specimen Certificate evidencing shares of Vystar common stock

5.1*	Opinion of Greenberg Traurig LLP

10.1**	Manufacturing Agreement between Vystar Corporation and Revertex (Malaysia) Sdn. Bhd. effective April 1, 2008

10.2	Executive Employment Agreement between Vystar Corporation and William R. Doyle, dated November 11, 2008

10.3	Management Agreement dated January 31, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.4	Letter Agreement dated August 15, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.5	Addendum to Management Agreement dated February 29, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.6	Warrant Purchase Agreement dated January 31, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.7	Management Agreement dated April 30, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.8	Warrant Purchase Agreement dated April 30, 2008 between Universal Capital Management, Inc. and Vystar Corporation

10.9	Vystar Corporation 2004 Long-Term Compensation Plan

10.10	Employment Agreement between Vystar Corporation and Sandra Parker dated April 1, 2008

21.1*	Subsidiaries of Vystar Corporation

23.1	Consent of Independent Registered Public Accounting Firm

23.2*	Consent of Greenberg Traurig, LLP (will be included in Exhibit 5.1)

24.1	Powers of Attorney (included on signature page)

* To be filed by amendment

** Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.

II-5

ARTICLES OF INCORPORATION

VYSTAR ACQUISITION CORPORATION

ARTICLE ONE

NAME

The name of the corporation is Vystar Acquisition Corporation.

ARTICLE TWO

REGISTERED OFFICE

The address of the registered office of the corporation in the State of Georgia is 3761 Venture Drive, Duluth, Gwinnett County, Georgia 30096. The name of its registered agent at such address is National Registered Agents, Inc.

ARTICLE THREE

PURPOSES

The purpose of the corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Georgia Business Corporation Code.

ARTICLE FOUR

CAPITAL STOCK

The aggregate number of shares of stock which the corporation shall have authority to issue is Ten Million (10,000,000) shares of $.0001 par value common stock.

ARTICLE FIVE

BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, repeal, rescind, alter or amend in any respect the Bylaws of the corporation.

ARTICLE SIX

NO PREEMPTIVE RIGHTS

No shareholders shall have any preemptive rights to acquire unissued shares of the corporation.

ARTICLE SEVEN

INITIAL PRINCIPAL OFFICE

The address of the initial principal office of the corporation is 4619 Steeplechase Lane, Flowery Branch, Georgia 30542.

ARTICLE EIGHT

SHAREHOLDER ACTION BY WRITTEN CONSENT

To the extent allowed by law, any action that is required to be or may be taken at a meeting of the shareholders of the corporation may be taken without a meeting if written consent, setting forth the action, shall be signed by persons who would be entitled to vote at a meeting those shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by classes) of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote were present and voted. Notice shall be given within ten (10) days of the taking of corporate action without a meeting by less than unanimous written consent to those shareholders on the record date whose shares were not represented on the written consent.

ARTICLE NINE

PLACE OF MEETINGS AND RECORDS

Meetings of shareholders of the corporation may be held within or without the State of Georgia, as the Bylaws may provide. The books of the corporation may be kept (subject to any provision of applicable law) within or without the State of Georgia at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws.

ARTICLE TEN

LIMITATION ON DIRECTORS' LIABILITY

A Director of this corporation shall not be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any appropriation, in violation of his duties, of any business opportunity of the corporation, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for the type of liability set forth under Section 14-2-832 of the Georgia Business Corporation Code, or (iv) for any transaction from which the Director received an improper personal benefit.

If the Georgia Business Corporation Code is hereafter amended to authorize the further elimination or limitation of the liability of a Director, then the liability of a Director of the corporation shall be eliminated or limited to the fullest extent permitted by the Georgia Business Corporation Code, as so amended.

Any repeal or modification of the foregoing provisions of this Article Ten by the shareholders of the corporation shall not adversely affect any right or protection of a Director of the corporation existing at the time of such repeal or modification.

The provisions of this Article Ten shall not be deemed to limit or preclude indemnification of a Director by the corporation for any liability of a Director which has not been eliminated by the provisions of this Article Ten.

ARTICLE ELEVEN

INCORPORATOR

The name and address of the incorporator is as follows:

Gerald L. Baxter

Greenberg Traurig, LLP

3290 Northside Parkway

Suite 400

Atlanta, Georgia 30327

IN WITNESS WHEREOF, the undersigned, being the incorporator hereinbefore named, has executed, signed and acknowledged these Articles of Incorporation this 17 ^th day of December, 2003.

/s/ Gerald L. Baxter

Gerald L. Baxter, Incorporator

CERTIFICATE OF MERGER

VYSTAR, L.L.C.,

a Georgia limited liability company

WITH AND INTO

VYSTAR ACQUISITION CORPORATION,

a Georgia corporation

Pursuant to the provisions of Section 14-11-901 of the Georgia Limited Liability Company Act, and Section 14-2-1105 of the Georgia Business Corporation Code, VYSTAR, L.L.C., a Georgia limited liability company shall, upon the filing of this Certificate of Merger, be merged with and into VYSTAR ACQUISITION CORPORATION, a Georgia corporation, with VYSTAR ACQUISITION CORPORATION, a Georgia corporation, being the surviving corporation in the merger (the “ Surviving Corporation ”).

II.

The Articles of Incorporation of VYSTAR ACQUISITION CORPORATION, a Georgia corporation, as in effect on the date hereof, shall be the Articles of Incorporation of the Surviving Corporation; provided , however , said Articles of Incorporation will, simultaneously with the filing of this Certificate of Merger, be amended by deleting Article One in its entirety and substituting therefore the following language, all as set forth on the form of Articles of Amendment attached as Exhibit “A ” hereto, until further amended or changed as provided by law:

“ARTICLE ONE

The name of the Corporation is Vystar Corporation.”

III.

The executed Agreement and Plan of Merger is on file at the principal place of business of the Surviving Corporation, which is located at 4619 Steeplechase Lane, Flowery Branch, Georgia 30542.

IV.

A copy of the Agreement and Plan of Merger will be furnished by the Surviving Corporation, on request and without cost, to any member or shareholder of either party to the merger.

The Agreement and Plan of Merger does not require the approval of the shareholders of the Surviving Corporation, pursuant to Section 14-2-1103(h) of the Georgia Business Corporation Code.

VI.

The request for publication of a Notice of Merger and payment therefore will be made as required by subsection (b) of Section 14-2-1105.1 of the Georgia Business Corporation Code.

IN WITNESS WHEREOF , the undersigned parties to the merger have caused this Certificate of Merger to be executed this 17 ^th day of December, 2003.

VYSTAR, L.L.C.

By: /s/ Travis W. Honeycutt

Travis W. Honeycutt, Member

VYSTAR ACQUISITION CORPORATION

By: /s/ Glen Smotherman

Glen Smotherman, Secretary

EXHIBIT “A ”

ARTICLES OF AMENDMENT

TO THE ARTICLES OF INCORPORATION

VYSTAR ACQUISITION CORPORATION

ARTICLE I.

The name of the corporation is Vystar Acquisition Corporation (the “Corporation”).

ARTICLE II.

The Corporation’s Articles of Incorporation are hereby amended by deleting Article One in its entirety and substituting therefore the following language:

“The name of the corporation is Vystar Corporation.”

ARTICLE III.

The amendment provided for herein was duly adopted by the Board of Directors of the Corporation on December __, 2003.

ARTICLE IV.

The amendment was adopted by the Board of Directors of the Corporation without shareholder action as shareholder action was not required.

IN WITNESS WHEREOF, the undersigned officer of the Corporation has hereunto set forth his hand as of this ___ day of December, 2003.

__________________________

Glen Smotherman, Secretary

ARTICLES OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

VYSTAR CORPORATION

Pursuant to the provisions of the Georgia Business Corporation Code, the corporation hereinafter named (the “Corporation”), does hereby adopt the following Articles of Amendment.

ARTICLE ONE

The name of the corporation is Vystar Corporation (the “Corporation”).

ARTICLE TWO

T he Articles of Incorporation of Vystar Corporation be amended by deleting Article Four in its entirety and substituting therefore the following language:

"The Corporation shall have authority to issue two classes of shares to be designated respectively, “Common Stock” and Preferred Stock.” The total number of shares which the Corporation is authorized to issue is Thirty-Five Million (35,000,000) shares of which Twenty-Five Million (25,000,000) shall be Common Stock and Ten Million (10,000,000) shall be Preferred Stock. Each share of Common Stock shall have a par value of $0.0001, and each share of Preferred Stock shall have a par value of $0.0001.

The Preferred Stock authorized by the Articles of Incorporation may be issued from time to time in one or more series, each of which shall have such designation(s) or title(s) as may be fixed by the board of directors of the Corporation (the “Board of Directors”) prior to the issuance of any shares thereof. The Board of Directors is hereby authorized to fix or alter the dividend rates, conversion rights, rights and terms of redemption, including sinking fund provisions, the redemption price or prices, voting rights and liquidation preferences of any wholly unissued series of Preferred Stock, and the number of shares constituting any such series and the designation thereof, or any of them. The rights, powers, preferences, limitations and restrictions, if any, accompanying such shares of Preferred Stock shall be set forth by resolution of the Board of Directors providing for the issue thereof prior to the issuance of any shares thereof, in accordance with the applicable provision of the Georgia Business Corporation Code. Each share of any series of Preferred Stock shall be identical with all other shares of such series, except as to the date from which dividends, if any, shall accrue. ”

ARTICLE THREE

The amendment provided for herein was duly adopted by the Board of Directors of the Corporation on August 10 ^th , 2004.

ARTICLE FOUR

In lieu of a meeting and vote of shareholders, the shareholders have given written consent to said amendment in accordance with the provisions of Section 14-2-704 of the Georgia Business Corporation Code.

IN WITNESS WHEREOF , the Corporation has caused these Articles of Amendment to be executed and attested by its duly authorized officers, this 10 ^th day of August, 2004.

VYSTAR CORPORATION, INC.

/s/ Glen Smotherman

By: Glen Smotherman

Title: Chief Financial Officer

Attest:

/s/ Matthew P. Clark

By: Matthew P. Clark

Title: Assistant Secretary

BYLAWS OF

VYSTAR CORPORATION

(a Georgia corporation)

ARTICLE I.

Offices

Section 1. Registered Office . The registered office of the Corporation shall be in the State of Georgia, and the name of the resident agent in charge thereof is the agent named in the Articles of Incorporation until changed by the Board of Directors (the "Board").

Section 2. Principal Office . The principal office for the transaction of the business of the Corporation shall be at such place as may be established by the Board. The Board is granted full power and authority to change said principal office from one location to another.

Section 3. Other Offices . The Corporation may also have an office or offices at such other places, either within or without the State of Georgia, as the Board may from time to time designate or the business of the Corporation may require.

ARTICLE II.

Meetings of Shareholders

Section 1. Place of Meetings . Meetings of shareholders shall be held at such time and place, within or without the State of Georgia, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Annual Meetings . Annual meetings of the shareholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution.

Section 3. Special Meetings . Special meetings of the shareholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board that has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws of the Corporation, include the power to call such meetings, and shall be called by the president or secretary at the request in writing of a majority of the Board, or at the request in writing of shareholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of shareholders may be called by any other person or persons specified in any provisions of the Articles of Incorporation or any amendment thereto, then such special meeting may also be called by the person or persons in the manner, at the times and for the purposes so specified. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice.

Section 4. Shareholder Lists . The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of shareholders, a complete list of shareholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any

shareholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or at the place of the meeting, and the list shall also be available at the meeting during the whole time thereof, and may be inspected by any shareholder who is present.

Section 5. Notice of Meetings . Notice of each meeting of shareholders, whether annual or special, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting has been called, shall be given to each shareholder of record entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Such notice shall be given to the shareholders by the Secretary, or in the case of the Secretary's absence or refusal or inability to act, by any other officer of the Corporation, and may be given by mail, by telecopy, by telephone or by personal service, or by any combination thereof as to different shareholders. If mailed, such notice shall be deemed to have been given when deposited in the United States mail, addressed to the shareholder at his address as it appears in the stock record books of the Corporation, with postage thereon prepaid. Notice by other permitted methods shall be deemed to have been given when personally delivered or when transmitted to the telephone or telecopy number previously supplied to the Secretary by the shareholder. Except as otherwise expressly required by law, notice of any adjourned meeting of the shareholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.

Whenever any notice is required to be given under the provisions of any applicable law or of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Notice of any meeting of shareholders shall be deemed waived by any shareholder who shall attend such meeting in person or by proxy, except a shareholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 6. Quorum and Adjournment . The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for holding all meetings of shareholders, except as otherwise provided by applicable law or by the Articles of Incorporation; provided, however, that the shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. If it shall appear that such quorum is not present or represented at any meeting of shareholders, the Chairman of the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting. The Chairman of the meeting may determine that a quorum is present based upon any reasonable

evidence of the presence in person or by proxy of shareholders holding a majority of the outstanding votes, including without limitation, evidence from any record of shareholders who have signed a register indicating their presence at the meeting.

Section 7. Voting . In all matters, when a quorum is present at any meeting, the vote of the holders of a majority of the capital stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Such vote may be viva voce or by written ballot; provided, however, that the Board may, in its discretion, require a written ballot for any vote; and further provided, that all elections for directors must be by written ballot upon demand made by a shareholder at any election and before the voting begins.

Unless otherwise provided in the Articles of Incorporation each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder.

Section 8. Proxies . Each shareholder entitled to vote at a meeting of shareholders may authorize in writing another person or persons to act for such holder by proxy, but no proxy shall be voted or acted upon after eleven months from its date, unless the person executing the proxy specifies therein the period of time for which it is to continue in force.

Section 9. Judges of Election . The Board may appoint a Judge or Judges of Election for any meeting of shareholders. Such Judges shall decide upon the qualification of the voters and report the number of shares represented at the meeting and entitled to vote, shall conduct the voting and accept the votes and when the voting is completed shall ascertain and report the number of shares voted respectively for and against each position upon which a vote is taken by ballot. The Judges need not be shareholders, and any officer of the corporation may be a Judge on any position other than a vote for or against a proposal in which such person shall have a material interest.

Section 10. Written Consent . Any action required to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting if written consent, setting forth the action so taken shall be signed by all the shareholders entitled to vote with respect to the subject matter thereof or, if so provided in the Articles of Incorporation, by shareholders who would be entitled to vote at a meeting holding shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by groups) of votes that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted.

ARTICLE III.

Directors

Section 1. Powers . The Board shall have the power to manage or direct the management of the property, business and affairs of the Corporation, and except as expressly limited by law, to exercise all of its corporate powers. The Board may establish procedures and

rules, or may authorize the Chairman of any meeting of shareholders to establish procedures and rules, for the fair and orderly conduct of any meeting including, without limitation, registration of the shareholders attending the meeting, adoption of an agenda, establishing the order of business at the meeting, recessing and adjourning the meeting for the purposes of tabulating any votes and receiving the result thereof, the timing of the opening and closing of the polls, and the physical layout of the facilities for the meeting.

Section 2. Number . The Board shall consist of one or more members in such number as shall be determined from time to time by resolution of the Board or by the shareholders at the annual meeting. Directors need not be shareholders, and each director shall serve until such person's successor is elected and qualified or until such person's death, retirement, resignation or removal.

Section 3. Vacancies and Newly Created Directorships . Any newly created directorship resulting from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy on the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.

Section 4. Meetings . The Board may hold meetings, both regular and special, either within or outside the State of Georgia.

Section 5. Annual Meeting . The Board shall meet as soon as practicable after each annual election of directors.

Section 6. Regular Meetings . Regular meetings of the Board shall be held without call or notice at such time and place as shall from time to time be determined by resolution of the Board.

Section 7. Special Meetings . Special meetings of the Board may be called at any time, and for any purpose permitted by law, by the Chairman of the Board (or, if the Board does not appoint a Chairman of the Board, the President), or by the Secretary on the written request of any two members of the Board unless the Board consists of only one director in which case the special meeting shall be called on the written request of the sole director, which meetings shall be held at the time and place designated by the person or persons calling the meeting. Notice of the time, place and purpose of any such meeting shall be given to the Directors by the Secretary, or in case of the Secretary's absence or refusal or inability to act, by any other officer. Any such notice may be given by mail, by telecopy, by telephone, by personal service, or by any combination thereof as to different Directors. If the notice is by mail, then it shall be deposited in a United States Post Office at least five days before the time of the meeting; if by telephone, by telecopy or by personal service, at least two days before the time of the meeting.

Section 8. Quorum . At all meetings of the Board, the majority of the whole Board shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the

Articles of Incorporation or by these Bylaws. Any meeting of the Board may be adjourned to meet again at a stated day and hour. Even though no quorum is present, as required in this Section, a majority of the Directors present at any meeting of the Board, either regular or special, may adjourn from time to time until a quorum be had. Notice of any adjourned meeting need not be given.

Section 9. Fees and Compensation . Each Director and each member of a committee of the Board shall receive such fees and reimbursement of expenses incurred on behalf of the Corporation or in attending meetings as the Board may from time to time determine. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 10. Meetings by Telephonic Communication . Members of the Board or any committee thereof may participate in a regular or special meeting of such Board or committee by any means of communication by which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.

Section 11. Committees . The Board may designate committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Upon the absence or disqualification of a member of a committee, if the Board has not designated one or more alternates (or if such alternate(s) are then absent or disqualified), the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member or alternate. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to: (a) approving or proposing to shareholders action that is required to be approved by shareholders; (b) adopting an agreement of merger or consolidation not requiring shareholder approval; (c) adopting, repealing or amending the Bylaws of the Corporation; (d) filling vacancies on the Board; or (e) taking any other action prohibited by law. Each committee shall have such name as may be determined from time to time by resolution adopted by the Board. Each committee shall keep minutes of its meetings and report to the Board when required.

Section 5. Action Without Meetings . Unless otherwise restricted by applicable law or by the Articles of Incorporation or by these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

Section 13. Removal . Unless otherwise restricted by the Articles of Incorporation or by law, any Director or the entire Board may be removed, with or without

cause, by the holders of a majority of shares entitled to vote at a meeting called for the purpose of removing such Director(s) and the meeting notice must state that one of the purposes of such meeting is the removal of such Director(s).

ARTICLE IV.

Officers

Section 1. Appointment and Salaries . The officers of the Corporation shall be appointed by the Board and shall be a President, one or more Vice Presidents, a Secretary and a Treasurer. The Board may also appoint a Chairman of the Board and the Board or the President may appoint such other officers (including Assistant Secretaries and Assistant Treasurers) as the Board or the President may deem necessary or desirable. The officers shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. The Board shall fix the salaries of all officers appointed by it. Unless prohibited by applicable law or by the Articles of Incorporation or by these Bylaws, one person may be elected or appointed to serve in more than one official capacity. Any vacancy occurring in any office of the Corporation shall be filled by the Board.

Section 2. Removal and Resignation . Any officer may be removed, either with or without cause, by the Board or, in the case of an officer not appointed by the Board, by the President. Any officer may resign at any time by giving notice to the Board, the President or Secretary. Any such resignation shall take effect at the date of receipt of such notice or at any later time specified therein and, unless otherwise specified in such notice, the acceptance of the resignation shall not be necessary to make it effective.

Section 3. Chairman of the Board . The Board may, at its election, appoint a Chairman of the Board. If such an officer be elected, he shall, if present, preside at all meetings of the shareholders and of the Board of Directors and shall have such other powers and duties as may from time to time be assigned to him by the Board of Directors.

Section 4. President . Subject to such powers, if any, as may be given by the Board to the Chairman of the Board, if there is such officer, the President shall be the chief executive officer of the Corporation with the powers of general manager, and he shall have supervision over and may exercise general executive powers concerning all of the operations and business of the Corporation, with the authority from time to time to delegate to other officers such executive and other powers and duties as he may deem advisable. If there be no Chairman of the Board, or in his absence, the President shall preside at all meetings of the shareholders and of the Board, unless the Board appoints another person who need not be a shareholder, officer or director of the Corporation, to preside at a meeting of shareholders.

Section 5. Vice President . In the absence of the President, or in the event of the President's inability or refusal to act, the Vice President (or if there be more than one Vice President, the Vice Presidents in the order of their rank or, if of equal rank, then in the order designated by the Board or the President or, in the absence of any designation, then in the order of their appointment) shall perform the duties of the President and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice President shall

perform such other duties and have such other powers as the Board may from time to time prescribe.

Section 6. Secretary and Assistant Secretary . The Secretary shall attend all meetings of the Board (unless the Board shall otherwise determine) and all meetings of the shareholders and record all the proceedings of the meetings of the Corporation and of the Board in a book to be kept for that purpose and shall perform like duties for the committees when required. The Secretary shall give, or cause to be given, notice of all meetings of shareholders and special meetings of the Board. The Secretary shall have custody of the corporate seal of the Corporation and shall (as well as any Assistant Secretary) have authority to affix the same to any instrument requiring it and to attest it. The Secretary shall perform such other duties and have such other powers as the Board or the President may from time to time prescribe.

Section 7. Treasurer . The Treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. The Treasurer may disburse the funds of the Corporation as may be ordered by the Board or the President, taking proper vouchers for such disbursements, and shall render to the Board at its regular meetings, or when the Board so requires, an account of transactions and of the financial condition of the Corporation. The Treasurer shall perform such other duties and have such other powers as the Board or the President may from time to time prescribe.

If required by the Board, the Treasurer and Assistant Treasurers, if any, shall give the Corporation a bond (which shall be renewed at such times as specified by the Board) in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of such person's office and for the restoration to the Corporation, in case of such person's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in such person's possession or under such person's control belonging to the Corporation.

Section 8. Assistant Officers . An assistant officer shall, in the absence of the officer to whom such person is an assistant or in the event of such officer's inability or refusal to act (or, if there be more than one such assistant officer, the assistant officers in the order designated by the Board or the President or, in the absence of any designation, then in the order of their appointment), perform the duties and exercise the powers of such officer. An assistant officer shall perform such other duties and have such other powers as the Board or the President may from time to time prescribe.

ARTICLE V.

Seal

It shall not be necessary to the validity of any instrument executed by any authorized officer or officers of the Corporation that the execution of such instrument be evidenced by the corporate seal, and all documents, instruments, contracts and writings of all kinds signed on behalf of the Corporation by any authorized officer or officers shall be as effectual and binding on the Corporation without the corporate seal, as if the execution of the

same had been evidenced by affixing the corporate seal thereto. The Board may give general authority to any officer to affix the seal of the Corporation and to attest the affixing by signature.

ARTICLE VI.

Form of Stock Certificate

Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of, the Corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary certifying the number of shares owned in the Corporation. Any or all of the signatures on the certificate may be a facsimile. If any officer. transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of the issue.

If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, a reference on the certificate to the state of incorporation shall be deemed a reference to the Articles of Incorporation and the provisions thereof governing the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Alternatively, such powers, designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock. Except as otherwise provided in section 14-2-625 of the Georgia Business Corporation Code, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Corporation will furnish without charge to each shareholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

ARTICLE VII.

Representation of Shares of Other Corporations

The President or any other officer or officers authorized by the Board or the President are each authorized to vote, represent and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The foregoing authority may be exercised either by any such officer in person or by any other person authorized so to do by proxy or power of attorney duly executed by said officer.

ARTICLE VIII.

Transfers of Stock

Upon surrender of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the

Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

ARTICLE IX.

Lost, Stolen or Destroyed Certificates

The Board may direct a new certificate or certificates to be issued in place of any certificate theretofore issued alleged to have been lost, stolen or destroyed, upon the making of an affidavit of the fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board may, in its discretion and as a condition precedent to the issuance, require the owner of such certificate or certificates, or such person's legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate.

ARTICLE X.

Record Date

The Board may fix in advance a date, which shall not be more than sixty days nor less than ten days preceding the date of any meeting of shareholders, nor more than 60 days prior to any other action, as a record date for the determination of shareholders entitled to notice of or to vote at any such meeting and any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise the rights in respect of any change, conversion or exchange of stock, and in such case such shareholders, and only such shareholders as shall be shareholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

ARTICLE XI.

Registered Shareholders

The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by applicable law.

ARTICLE XII.

Fiscal Year

The fiscal year of the Corporation shall be fixed by resolution of the Board.

ARTICLE XIV.

Amendments

Subject to any contrary or limiting provisions contained in the Articles of Incorporation, these Bylaws may be amended or repealed, or new Bylaws may be adopted, (a) by the shareholders of the Corporation, or (b) by the affirmative vote of a majority of the full Board at any regular or special meeting. Any Bylaws adopted or amended by the shareholders may be amended or repealed by the Board or the shareholders, unless the shareholders in amending or repealing a particular Bylaw provide expressly that the Board may not amend or repeal that Bylaw.

ARTICLE XV.

Dividends

Section 1. Declaration . Dividends on the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board at any regular or special meeting, pursuant to law, and may be paid in cash, in property or in shares of the capital stock.

Section 2. Set Aside Funds . Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall deem to be in the best interests of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE XVI.

Indemnification and Insurance

Section 1. Right to Indemnification . Except as otherwise provided in the Articles of Incorporation or by law, each person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action or inaction in an official capacity or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the laws of Georgia, as the same exist or may hereafter be amended, against all costs, charges, expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided , however , that, except as provided in Section 2 hereof, the Corporation shall indemnify any such

person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided , however , that, if the Georgia Business Corporation Code requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same scope and effect as the foregoing indemnification of directors and officers.

Section 2. Right of Claimant to Bring Suit . If a claim under Section 1 of this Article is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has failed to meet a standard of conduct which makes it permissible under Georgia law for the Corporation to indemnify the claimant for the amount claimed. Neither the failure of the Corporation (including the Board, independent legal counsel or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is permissible in the circumstances because he or she has met such standard of conduct, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its shareholders) that the claimant has not met such standard of conduct, shall be a defense to the action or create a presumption that the claimant has failed to meet such standard of conduct.

Section 3. Non-Exclusivity of Rights . The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, bylaw, agreement, vote of shareholders or disinterested directors or otherwise.

Section 4. Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under Georgia law.

Section 5. Expenses as a Witness . To the extent that any director, officer, employee or agent of the Corporation is by reason of such position, or a position with another

entity at the request of the Corporation, a witness in any action, suit or proceeding, he shall be indemnified against all costs and expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

Section 6. Indemnity Agreements . The Corporation may enter into agreements with any director, officer, employee or agent of the Corporation providing for indemnification to the full extent permitted by Georgia law.

Manufacturing Agreement

This Co-Development and Cooperation Agreement (“Agreement”) is made and entered into by and between Vystar Corporation, a Georgia corporation in the United States with its principal offices located at 3235 Satellite Blvd., Building 400, Suite 290 Duluth, GA 30096 (hereinafter referred to as “Vystar”) and Revertex (Malaysia) Sdn. Bhd., a Malaysian company with its principal offices located at 1 ½ Mile, Jalan Batu Pahat, K.B. 508, 860009 Kluang, Johor, Malaysia (hereinafter referred to as “Revertex”), effective April 1, 2008 (“Effective Date”) based on the terms and conditions contained herein.

RECITALS

WHEREAS Vystar has considerable scientific and technological knowledge and capabilities in the field of low-allergen natural rubber latex, and specifically has obtained the following patents:

(1) 6,906,126; (2) 7,056,970; (3) PCT/US2005/025018 and has filed the following pending applications (1) 11,249,887; and (2) 61/022,250 “Vystar Patents”); and

WHEREAS Revertex has considerable technological knowledge and capabilities in the field of processing natural rubber latex; and

WHEREAS Vystar and Revertex desire to jointly investigate and develop large-scale standard operating procedures (“SOPs”) for processing low-active-protein, low-allergen, natural rubber latex; and

WHEREAS Vystar desires to appoint and Revitex desires to accept such appointment as an authorized and licensed manufacturer of Vystar’s patented Vytex CL60 and Vytex PV forms of natural rubber latex.

WHEREAS the parties have entered into a Letter of Intent dated August 22, 2006, as amended December 31, 2006 and June 19, 2007 (collectively, the “LOI”) in which the parties have begun Development to explore such a relationship.

NOW THEREFORE, in consideration of the mutual performance of the terms and conditions hereinafter set out, IT IS HEREBY AGREED AS FOLLOWS:

ARTICLE I Definitions

1.1 "Application" shall mean the application of chemicals and/or processes to natural rubber latex pursuant to and consistent with the Vystar Patents , including any future patents, continuations, derivative works, and/or new developments that would use any of the Vystar Patents as prior art or are otherwise related to the technology reflected by the Vystar Patents.

1.2 “Confidential Information” shall mean all information disclosed to a Party (“Receiving Party”) by the other Party (“Disclosing Party”) in connection with this Agreement that is conveyed (a) in written, graphic, or other tangible form and conspicuously marked “confidential”, “proprietary” or in some other manner to indicate its confidential or proprietary nature; or (b) orally, provided that such information is designated in writing as confidential or proprietary within thirty (30) days of such oral disclosure. Additionally, the following information shall be deemed Confidential Information even if not conspicuously marked “confidential” or “proprietary”: all documentation, formulations, algorithms, compilations, manuals, manufacturing processes, business methods, computer programs, symbols, or other know-how and supporting material related to the research, development, manufacture, marketing, sale, copy rights, trademarks, patents, technologies, trade secrets, Industrial Property Rights, and internal management systems of the Products, Systems and Technology subject to this Agreement, as defined herein, that are not generally known to the public, whether conveyed verbally, in writing, on diskette, on tape or other media.

1.3 “Confirmation” shall mean the written confirmation signed by both Vystar and Revertex accepting the Plan for Development of the Products.

1.4 “Copyrights” shall mean all copyrights, trademarks, trade names or other usages, whether registered or not, relating to the research, development, design, manufacture, package, assembly, testing, marketing, or sale of the Products in any and all jurisdictions around the world.

1.5 “Development” shall mean the development of manufacturing processes, procedures and other SOPs for the Application in large-scale processing to produce the Products.

1.6 “Improvements” shall mean any modifications, improvements, changes or derivative works to the Products, Technology, technical documentation or Information as defined herein, or Systems.

1.7 “ Industrial Property Right" shall mean any and all inventions, discoveries, developments, improvements and works relating either to the Application and/or the Products and their related manufacturing processes, whether patentable or not, including but not limited to patents and know how, developed by the Parties under this Agreement after the effective date of this Agreement.

1.8 “Know-how” shall include, but shall not be limited to, all technical information, (including but not limited to technical data or specifications, drawings, engineering information, process or production information, formulas, information on compositions of matter, techniques or methods, software or computer programs, and proprietary tools) related to the research, development, design, manufacture, package, assembly or testing of the Products;

1.9 “Licensed Activities” shall mean to research, develop, design, manufacture, package, assemble, test, and improve the Application for purposes of toll-manufacturing the Products for Vystar and/or marketing, selling and distributing the Products itself .

1.10 “Patents” shall mean all patent rights in any and all jurisdictions and all right, title and interest in all patent applications and patents to issue on them, all letters of patent or equivalent rights and applications, including any reissue, extension, division, continuation or continuation-in-part of applications throughout the world;

1.11 “Plan” shall mean a development plan that reflects the feasibility of the Development of the Products by Revertex, which shall initially be drafted by Revertex, and is attached hereto as Exhibit A, and made a part of this Agreement. Vystar maintains responsibility within the Plan for the Vystar Technology and the Application and Revertex maintains responsibility for the processes of treating and refining the natural rubber latex.

1.12 “Raw Materials” shall mean all items required for the Toll manufacture of the Products.

1.13 “Products” shall mean the low-active-protein and/or low-allergen natural rubber latex processed product resulting from the Application.

1.14 “Revertex Services” shall mean those services listed on Exhibit D attached hereto and incorporated herein by reference.

1.15 “Systems” shall mean any management or other system shared by Vystar with Revertex for the purposes of Revertex’ Development of the Products and optimizing the performance of production lines of Revertex for this purpose.

1.16 “Toll” or “Tolling” shall mean to convert/process Raw Materials into Products.

1.17 “Tolling Waste” shall mean any waste, as that term is defined under Regulatory Requirements as defined in Section 6.3, resulting from the Tolling of Raw Materials into Products under this Tolling Agreement.

1.18 “Technical Documentation” shall mean all drawings, data, charts, graphs, procedures, books, operation manuals, data, technical processes and other tangible technical literature necessary for the Systems and/or the research, development, design, manufacture, package, assembly or testing of the Products.

1.19 “Technology” shall mean, collectively, patents, know-how, copyrights, trademarks, trade names, and other Confidential Information which are disclosed or provided pursuant to the terms of this Agreement, and are necessary for research, development, manufacture, packaging, assembly or testing of the Products. That Technology controlled by Vystar as of the date of this Agreement, thereafter acquired by Vystar during the term of this Agreement, or otherwise developed during or pursuant to this Agreement or which relates to the Application, including all SOPs and other manufacturing processes previously developed or developed during the term of this Agreement or the LOI related to the Application, shall be referred to as “Vystar Technology”. That Technology controlled by Revertex as of the date of this Agreement, thereafter acquired by Revertex during the term of this Agreement, or otherwise developed during or pursuant to this Agreement related to the processing of compounded latex and prevulcanized lattices, and which does not relate to or depend upon the Application, the Products or the manufacturing or other processing for the Applications and Products, shall be referred to as “Revertex Technology”.

1.20 “Vystar Services” shall mean technical support or consulting services Vystar tenders to Revertex under this Agreement.

1.21 “Vytex CL60” shall mean the particular product resulting from applying the Application to the natural rubber latex that has not been treated with pre-vulcanized chemical processes.

ARTICLE II. Manufacturing, Packaging, Distribution and Commercialization of Products

2.1 Revertex shall procure the relevant Raw Materials for manufacturing and/or processing the Products. The cost for such Raw Materials shall be billed to Vystar on a cost plus model as described in Exhibit C on Revertex Fees for the Products that Vystar sells. Revertex shall inspect and test before unloading all Raw Materials promptly upon receipt and give Vystar immediate notice of defective or substandard Raw Materials. Revertex’s failure to provide such notice shall constitute a material breach of this Agreement.

2.2 Pursuant to the Plan and the Services described on Exhibit D, it is anticipated that Revertex will process, package, distribute, and possibly market and sell the Products. If Revertex desires to engage in these and other Licensed Activities, as defined below, Revertex shall comply with the following requirements:

2.2.1 With the exception of any product that Revertex is currently marketing as of the Effective Date, Revertex shall manufacture, distribute, promote and/or sell only the Vystar Products as Revertex’ chemically-treated, low-active-protein or low-allergen natural rubber latex product.

2.2.2 Revertex must include the Vystar trademark and trade name “Vytex” on all Product packaging, and if Revertex sells any of the Products for its own benefit, upon paying Vystar a Licensing fee that will be subject to a separate agreement, Revertex shall require of any of Revertex’ customers to whom Revertex markets, sells or distributes the Products that they similarly include the Vytex tradename and in the same manner as required of Revertex on all Product packaging manufactured, processed, packaged, marketed, sold or otherwise distributed by those Revertex customers. All such trademarks and/or trade names on all packages shall be used and placed as mutually agreed upon by the parties. All such marketing activities and trademark usage requirements shall be incorporated in this Agreement as Exhibit B. Neither Revertex nor any Revertex customer may make any changes to the use and placement of the Vystar trademarks and/or trade names without the express written approval of Vystar.

2.2.3 Should Revertex determine it desires to market and/or sell any of the Products, Vystar and Revertex (and/or Revertex’ agents approved by Vystar) shall mutually market the Vytex natural rubber latex, and each party shall include the other party in its marketing activities and materials, including any electronic or on-line product listing and catalogs.

2.2.4 Generally, Vystar shall have responsibility for marketing to the Product end-users world-wide, including product development and marketing groups located in the North American region and in companies not otherwise covered by Revertex. If Revertex elects to sell any of the Products, Revertex shall have responsibility for sales and marketing of the Products to the Product manufacturers outside of the North American region, specifically in Southeast Asia and Europe currently covered by Revertex, or as otherwise agreed to between the Parties.

2.2.5 Each party shall be fully responsible for the costs of its marketing materials for its marketing efforts. In the event that the parties engage in joint efforts that result in joint marketing materials, the parties shall share equally in these costs unless otherwise expressly agreed by the parties.

2.2.6 Each party shall provide to the other party sufficient documentation and training to facilitate each party’s co-marketing efforts under the licensing and non-disclosure requirements contained in this Agreement.

2.2.7 Each Party hereby grants a limited, nonexclusive, world-wide, non-assignable and non-transferable, royalty-free license to each party’s trademarks and copyrights for the co-marketing and sales activities and materials, provided that the trademarks and marketing materials are not altered or modified from the parties’ approved versions.

2.2.8 Each party shall only use marketing materials related to the other party that are approved by the other party.

2.2.9 Each party shall make opportunities available to invite the other party to marketing and sales meetings with potential customers and each party shall make good faith efforts to attend such sales and marketing meetings.

2.3 Vystar shall provide to Revertex quarterly estimates, or such other interval mutually agreed to by the parties, reflecting the expected volume for Products required by Vystar.

2.3.1 Vystar will transmit orders for quantities of each of the Products to Revertex by separate orders containing details.

2.3.2 Revertex shall invoice Vystar for processing and storage of Products, along with the invoicing of any Raw Material provided by the Revertex, pursuant to sections 4.1, and in accordance with the schedule of fees shown in Exhibit C.

2.4 Warehousing/Storage. To the extent that Vystar Raw Materials and Products are stored at Revertex’s site. Revertex shall provide sufficient and appropriate facilities for such storage. Details of such facilities are provided in Exhibit F.

2.5 Sole right and title to Products hereunder shall remain in Vystar at all times. Revertex shall not sell, transfer, grant any security interest in, encumber or otherwise dispose of any interest of Vystar in the Products.

2.6 Transportation. If required by Revertex, Vystar will supply to Revertex information to assist Revertex in complying with any relevant transportation regulations for shipping Products.

2.6.1 Revertex shall ensure that precautionary labels, tags, hazard warnings statements, and other safety information are affixed to the containers in which the Products are shipped, in accordance with the relevant transportation regulations and specific directions furnished Revertex by Vystar.

2.6.2 Where the drumming of materials is part of the Tolling agreement, Vystar will provide Revertex with specific information which Revertex will use to print drum labels. Revertex shall affix labels to all drums and ensure that all drums, labels and markings comply with all Regulatory Requirement, including, without limitation, any relevant transportation regulations.

2.7 Waste, Recycle & Contamination. Revertex accepts all responsibilities under Regulatory Requirements, including the status of any generator or other equipment, for Tolling Waste. Prior to the initial contract, purchase order, or arrangement for removal, transportation, treatment, storage or disposal of Tolling Waste, Revertex shall notify Vystar with specifics of the transaction, so that Vystar may state any objection.

2.7.1 Revertex agrees promptly to notify Vystar of any change in the Tolling of Vystar Raw Materials into Products that could affect the quantity, type, or character of any Tolling Waste.

2.7.2 If any non-waste material is produced by Revertex from Vystar Raw Materials or Products, which material Revertex intends to recycle or reuse or send to a third party for recycle or reuse, Revertex agrees to notify Vystar in advance of the recycle or reuse activity.

2.8 Spill and Transportation Accident Notification. Revertex shall immediately notify Vystar upon discovery of any leak or spill of Vystar Raw Materials or Products at Revertex’s site, if such leak or spill is not totally contained, recovered, and prevented from reaching the air, soil or water. Revertex shall report all incidents under Regulatory Requirements.

2.8.1 Revertex shall immediately notify Vystar, within3 hours maximum, of any transportation or operational accident involving Vystar Raw Materials or Finished Products. .

2.8.2 Revertex has a continuing obligation to notify Vystar of any matter addressed by this Section 2.8, even if such notice would not be immediate, and to update Vystar of any significant new or changed information or developments.

ARTICLE III. Fees

Where Revertex provides the Revertex Services described in Exhibit D for Vystar without selling any of the Products itself, Vystar shall pay to Revertex the fees described on Exhibit C labeled “Revertex Fees” (“Revertex Fees”).

ARTICLE IV. Limited License

4.1 Subject to the terms and conditions of this Agreement, Vystar hereby grants to Revertex a non-transferable, non-assignable, non-exclusive, world-wide, limited right and license to the Vystar Technology, Technical Documentation and Systems to research, develop, design, manufacture, package, assemble, test, and improve the Application for purposes of toll-manufacturing the Products for Vystar and/or marketing, selling and distributing the Products itself (“Licensed Activities”).

4.2 Subject to the terms and conditions of this Agreement, Vystar hereby also grants to Revertex a non-transferable, non-assignable, non-exclusive, world-wide limited right and limited license to use the Vystar trademarks, “Vytex™”, and other trademarks or trade names as expressly approved by Vystar on the packaging of the Products. Revertex shall not use any of Vystar’s trademarks or trade names in any other manner other than as expressly prescribed by Vystar. Revertex shall not deface, obliterate or otherwise modify any of the Vystar trademarks or trade names.

4.3 The Licenses in Sections 4.1 and 4.2 herein shall collectively be referred to as the “License”.

4.4 Revertex shall not sell, transfer or assign any aspect of the License. The License shall be valid for the term of this Agreement unless terminated earlier as provided in this Agreement. Revertex shall not, and shall not permit its employees, representatives or agents to sell, assign, lease, sublicense, transfer or disclose to any third party, or allow any third party to use the, Vystar Technology, Technical Documentation, Systems or the Application except as specifically permitted by this Agreement.

4.5 Nothing contained herein shall be construed as granting the receiving party a license, an option on a license or any right to operate under any patent, technology or know how, or more generally under any Industrial Property Right of the disclosing party which may be disclosed by it under this Agreement and which shall remain its complete and full property.

4.6 In the event that Revertex determines it may need to utilize third parties to assist in the manufacturing of Vytex product due to the volume, the parties shall follow the procedures outlined in Article V Restriction on Subcontracting; Nonassignability provision described herein.

ARTICLE V. Restriction on Subcontracting; Nonassignability

5.1 Revertex shall not subcontract the Development or any of the other Licensed Activities in whole or in part to any third party without the prior written consent of Vystar. The rights and obligations granted and imposed upon the Parties pursuant to this Agreement shall not be assignable or otherwise capable of delegation, transferable, or subject to encumbrance by act of either Party or by operation of law or otherwise without the express written consent of the other Party. Any attempt to assign, delegate, transfer or encumber such rights or duties, absent the other Party’s prior written consent shall be null and void. Notwithstanding the foregoing, a transfer of all or substantially all of the assets of either Party to an affiliate of that Party shall not be deemed a prohibited assignment for purposes of this Article.

5.2 In the event that Revertex would require use of a third party to assist in the processing and or manufacture of the Products using the Application in order to meet Vystar’s quantities required, Revertex shall communicate such fact to Vystar with sufficient notice to allow Vystar to review such third party’s qualifications and approve of any such third party. In the event of Vystar’s approval to Revertex’ use of any such third party subcontractor to assist Revertex in processing or manufacturing the Products using the Application, such third party contractor shall be required to execute a limited license and confidentiality agreement with Vystar prior to any disclosure of Vystar’s Application and Vystar Technology by Revertex. For all other components of the subcontractor processing and manufacturing relationship, Revertex shall contract directly with and be responsible to Vystar for the third party’s production of the Products. The use of any third parties pursuant to this section shall not change the Revertex Fees charged to Vystar for the Revertex Services as described herein and on Exhibit C.

ARTICLE VI. Quality & Performance Standards Compliance

6.1. Revertex shall engage in the Development activities and the other Licensed Activities with reasonable skill and care. Revertex represents that it has the requisite expertise, ability and legal right to engage in the Development activities and other Licensed Activities and that it can and will perform the Development activities and other Licensed Activities in an efficient and ethical manner.

6.2 Revertex shall establish and maintain programs which address continuous improvement of final product quality, and strive to achieve goals similar to the ISO 9001 quality process at a minimum. The status of such programs are to be shared with Vystar.

6.3 Revertex acknowledges that the Products are or may be governed by governmental regulations and licensing in the various jurisdictions in which the Products may be marketed, distributed and/or sold. It shall be the duty of Revertex to ascertain whether any drawings and specifications are at variance with the Regulatory Requirements applicable to it as a toll manufacturer before starting Tolling. If Revertex discovers any variance with the Regulatory Requirements in any drawings and/or specifications, Revertex shall promptly notify Vystar in writing and the necessary changes shall be made before proceeding with the part of the Tolling affected. Revertex shall obtain all permits necessary for the Tolling, and shall give all required notices. Revertex shall be responsible for complying with all government regulations and for seeking all required licenses, certifications and approvals required in order to comply with all governmental regulations and licensing that apply to Revertex’ Development activities and other Licensed Activities and as otherwise may be required of Vystar as the processor of record and which Vystar would be required to pass along to any of its contractor or toll manufacturers (“Regulatory Requirements”). Revertex shall have full and proper regard to and shall comply with all other relevant laws, regulations and codes of conduct in the performance of the Development and other Licensed Activities pursuant to this Agreement.

6.4 Revertex shall have a drug and alcohol policy applicable while performing services for Vystar. Revertex shall ensure that its employees and agents do not perform any service for Vystar while under the influence of alcohol or any controlled substance. Revertex is responsible for all aspects of compliance with regulations promulgated by the Occupational Safety & Health Act, 1994 and any applicable sate worker regulations. This obligation includes all training and hazard communication as required in the OSHA Regulations. If Revertex has not received sufficient information on the Vystar Raw Materials or Products, then Revertex shall contact Vystar for this information. Attached hereto as Exhibit E are Material Safety Data Sheets covering the Vystar Raw Materials to be Tolled by Revertex and covering the Products. If not already posted, Revertex agrees to disseminate and post copies of the Material Safety Data Sheets, including warnings and safety and health information concerning the Vystar Raw Materials and Products and/or their containers, in a conspicuous place in Revertex’s plant to which employees, agents, contractors or customers of Revertex have open and frequent access. Revertex agrees to otherwise advise its employees, agents, contractors or customers by disseminating all information furnished by Vystar regarding the possible hazards of, precautions concerning, and safe-handling procedures utilized in dealing with: (1) the Vystar Raw Materials, and (2) the Products to the extent not already disseminated by Revertex as a result of Revertex’ activities other than Vystar Tolling.

6.5 Revertex shall not make any modifications to the Technical Documentation, the Systems, the Vystar Technology, Application or the Products without the express written approval of Vystar. If Revertex modifies or causes the modification without Vystar’s approval of the Technical Documentation, Systems, Vystar Technology, Application or the Products that are developed, manufactured, marketed, distributed or sold, Revertex shall indemnify and hold harmless Vystar against any and all claims, damages, fines, costs and expenses (including without limitation, reasonable attorneys’ fees and costs of suit) resulting from the defense, settlement and/or regulatory action related to Revertex’ use, development, manufacture, packaging, marketing, sale, distribution or any other Licensed Activity or other activity with respect to the unapproved modified Products. This indemnification shall survive termination or expiration of the Agreement.

6.6 In compliance with Vystar’s quality assurance procedure, Revertex is required to retain a sample measuring 500 cubic centimeters of Product after loading for each tank truck delivery. The sample shall be retained for three (3) months after each delivery. Provided that, in the event of a claim relating to any Product delivered, the sample of the said Product delivered shall be retained as long as necessary.

6.7 Revertex, in performing its obligations under this Agreement, shall establish and maintain appropriate business standards, procedures, and controls, including those necessary to avoid any real or apparent impropriety or adverse impact on the interests of Vystar. Revertex shall review with Vystar at reasonable frequency during performance of this Agreement, Revertex’s business standards, procedures, and controls, including, without limitation, those related to the activities of Revertex’s employees and agents in their relations with Vystar employees, agents and representatives, suppliers, subcontractors and third parties.

ARTICLE VII. No Warranties

BOTH VYSTAR AND REVERTEX GIVE NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE with respect to the activities described in this Agreement except as expressly set forth in this section. Neither party shall communicate any warranties on behalf of the other to any customer to which it markets, sells or distributes the Products other than that expressly described herein. Each party shall hold harmless and indemnify the other party for any warranties that it extends to any third party in violation of this provision.

IN NO EVENT WILL EITHER PARTY OR ANY OF ITS SUPPLIERS OR LICENSORS BE LIABLE TO THE OTHER PARTY FOR: (1) LOST PROFITS, LOST DATA OR LOST USE, OR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR FOR ANY INDIRECT, SPECIAL, OR PUNITIVE DAMAGES REGARDLESS OF THE FORM OF ACTION, WHETHER CONTRACT, TORT STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF CUSTOMER OR ANY OTHER PERSON HAS ADVISED THAT PARTY OR ANY OF ITS SUPPLIERS OR LICENSORS OF THE POSSIBILITY OF SUCH DAMAGES; (2) DAMAGES CAUSED BY THE OTHER PARTY’S FAILURE TO PERFORM ITS RESPONSIBILITIES UNDER THIS AGREEMENT; (3) REPAIRS OR ALTERATIONS DONE WITHOUT THE PRIOR WRITTEN APPROVAL OF THE OTHER PARTY; OR (4) USE OF THE OTHER PARTY’S TECHNOLOGY, TECHNICAL DOCUMENTATION, SYSTEMS, OR APPLICATION OR ULTIMATE PRODUCTS IN A MANNER THAT IS NOT AUTHORIZED BY THIS AGREEMENT. THE REMEDY OF CONSEQUENTIAL DAMAGES SHALL NOT BE AVAILABLE EVEN IN THE EVENT THE SOLE AND EXCLUSIVE REMEDY OF REPAIR AND/OR REPLACEMENT FAILS OF ITS ESSENTIAL PURPOSE.

THIS LIMITATION WILL NOT APPLY TO CLAIMS FOR DEATH OR PERSONAL INJURY CAUSED SOLELY BY THE NEGLIGENCE OF A PARTY OR ITS EMPLOYEES, SUBCONTRACTORS OR AGENTS.

ARTICLE VIII. Reports, Records, Access & Audits

8.1 Revertex shall submit to Vystar its final report on the Development on or prior to the date specified in the Plan.

8.2 In the event that Revertex is unable to submit the final report by the specified date as referred to in the preceding paragraph, Revertex shall notify Vystar to that effect without delay.

8.3 Vystar may from time to time request that Revertex make a report on the progress of the Development and manufacture or other Licensed Activities and Vystar shall be entitled to provide instructions or assistance for, or be present at, the implementation of the Development or manufacture and packaging, at the site where Revertex carries out the Development and/or manufacture and packaging.

8.4 Revertex shall keep accurate and thorough records in sufficient detail to enable Vystar and/or any governmental or licensing body to inspect records and activities related to the Development and other Licensed Activities. Upon Vystar’s request, and after reasonable prior notice, Revertex shall permit Vystar or an independent auditor to have access during ordinary business hours to Revertex’ records and operation to determine Revertex’ compliance with this Agreement and with respect to the Development and other Licensed Activities. Such examination shall be at Vystar’s expense and shall not take place more than once each six (6) months, unless required more often by a governmental or licensing agency or Vystar has reason to believe Revertex may not be complying with the Regulatory Requirements, the License or other obligations described herein.

8.5 Revertex shall retain the original of the final report on the Development, original data, experimental products, and other related materials in an appropriate manner for a period of 3 years from the date on which the final report is submitted to Vystar. The procedures after the expiration of the retention period shall be determined through discussion between the parties.

8.6 Revertex and Vystar agree that all transactions will be accurately reflected in their books and records, and that no funds or other assets will be paid directly or indirectly to government officials (or persons acting on their behalf) for the purpose of influencing government decisions or actions. Violation of this policy will result in the immediate termination of this Agreement. No employee, agent, contractor, subcontractor or other third party used by Vystar will have the authority to give any direction, either written or oral, relating to the making of any commitment by Revertex, Vystar or their agents to any third party in violation of the terms of this section.

8.7 If Revertex receives any request for audit, inspection, information or other action by a governmental or licensing body, or other third party with respect to the Products or the Application, Revertex shall immediately notify Vystar. If Revertex becomes aware of any defect or other concern regarding the Products or Application which it knows or suspects may cause injury, harm or other hazards associated with the use or control of the Products, Revertex shall immediately inform Vystar of such and both parties will determine the appropriate course of action with respect to notifying any governmental authority, customers or other third party(ies).

ARTICLE IX . Product & Technology Discontinuation or Modification

9.1 Vystar reserves the right to modify or discontinue any Vystar Technology, System, Technical Documentation, Application and resulting Product upon thirty (30) days notice to Revertex. If such modification or discontinuation is due to Regulatory Requirements, as described in this Agreement, the notice period of such modification or discontinuation shall be pursuant to such Regulatory Requirements and will be as stated in the notice to Revertex. In some cases, this modification or discontinuation may be effective immediately.

9.2 In the event that, prior to the completion of the Development, Vystar provides Revertex with notice of discontinuation of all or part of the required test, Revertex shall promptly discontinue the Development. The settlement of the development fees accrued prior to the discontinuation shall be made by agreement through discussion between the parties.

9.3 In cases where the Development is discontinued pursuant to the preceding paragraphs, Revertex shall promptly provide to Vystar the results of the Development achieved prior to the termination. The manner to deal with the original data and experimental products with respect to the Development having been created prior to the discontinuation shall be determined through discussion between the parties.

ARTICLE X. Confidentiality

10.1 During the course of performing this Agreement, it is anticipated that both Parties will learn Confidential Information of the other Party. Each Party shall keep confidential the Confidential Information and shall not use or disclose, either directly or indirectly, to any person or entity the Confidential Information of the other Party for any purpose other than as provided for in this Agreement without the express, written permission of the other Party, except that each Party may: (i) use the Confidential Information of the other Party to carry out the activities expressly permitted hereunder; (ii) disclose the Confidential Information of the other Party to those persons who have a need to know such Confidential Information in order to carry out the activities expressly permitted hereunder on behalf of the Receiving Party and who are bound by confidentiality obligations no less stringent than those contained herein; and (iii) disclose the Confidential Information as required by law or orders from any government departments, legislative bodies or governing courts, provided that, in such event, the Receiving Party subject to such obligation shall promptly notify the Disclosing Party to allow intervention to contest or minimize the scope of the disclosure or apply for a protective order. Each Party agrees to take precautions to prevent unauthorized disclosure or use of the Confidential Information, and such precautions shall be consistent with the precautions used to protect the Receiving Party’s own confidential information of like significance, but in no event less than the care exercised by a reasonable business person in the protection of its valuable confidential information. In the event that the Receiving Party learns or has reason to believe that any person who has had access to the Confidential Information of the Disclosing Party has violated or intends to violate the terms of this Agreement, the Receiving Party shall immediately notify the Disclosing Party and shall cooperate with the Disclosing Party in seeking any relief against any such person or violation.

10.2 In the event of any unauthorized disclosure of the Disclosing Party’s Confidential Information by any of the Receiving Party’s employees, vendors, contractors, agents or other third party with access to the Disclosing Party’s Confidential Information, the Disclosing Party shall have the right to commence legal proceedings directly against such employee, vendor, contractor, agent or third party, and such right shall be stipulated in the non-disclosure undertaking executed by the Receiving Party’s employees, vendors, contractors, agents or other third parties. The Parties hereto both acknowledge that damages that would be suffered by the Disclosing Party as a result of a breach of the provisions of this Article X may not be determinable and that an award of a monetary judgment for such a breach would be an inadequate remedy. Consequently, the Disclosing Party shall have the right, in addition to any other rights it may have, to obtain, in any court of competent jurisdiction, injunctive relief or any other equitable relief to restrain any breach or threatened breach of any provision of this Article X or otherwise to specifically enforce any of the provisions hereof.

10.3 Confidential Information shall include, but shall not be limited to all aspects of the Technology, Systems, Technical Documentation, Application and Products shall be deemed as Confidential Information for all purposes and at all times. Notwithstanding the above, the confidential obligation contained in this paragraph shall not apply to any of the following information to the extent that it can be demonstrated in writing that the information:

1) is already known to the public through no violation of a nondisclosure obligation at the time of disclosure by the other party;

2) becomes known to the public without fault of the receiving party after the disclosure by the other party;

3) is already in the possession of the receiving party at the time of disclosure by the other party;

4) is lawfully obtained without any obligation of confidentiality from a third party who has the right to make such disclosure (subparagraphs 1-4 shall be referred to as “Non-Confidential Information”); or

5) is required to be disclosed by any governmental or judicial agency, but only after the Receiving Party has given the Disclosing Party notice of such disclosure request and given the Disclosing Party an opportunity to object and/or seek a protective order.

10.4 The Receiving Party must seek prior written approval from the Disclosing Party for any vendors, contractors, subcontractors, or other third parties that the Receiving Party proposes to use for any work involving the Disclosing Party’s Confidential Information. Any such vendors, contractors, subcontractors and third parties must be bound by confidentiality, nondisclosure agreement containing terms equivalent to those contained herein and the form of which has been approved by the Disclosing Party. The Receiving Party shall also procure non-disclosure undertakings from its employees having access to the Confidential Information on a need-to-know basis. The terms of the non-disclosure undertaking shall be no less stringent than those contained herein.

10.5 All Confidential Information of a Disclosing Party shall remain the sole property of such Disclosing Party. At the termination or expiration of this Agreement, or at any time the Disclosing Party requires, the Receiving Party shall return to the Disclosing Party all equipment, manuals, reports or other written or soft copy information regardless of the form, whether originals, copies, derivative works, test results or other information created by the Receiving Party reflecting the Disclosing Party’s Confidential Information, and shall not keep or retain any copies of the Disclosing Party’s Confidential Information. The confidentiality and nondisclosure obligations contained in this Article X shall survive termination of this Agreement until such time as the Confidential Information becomes Non-Confidential Information pursuant to the terms contained herein.

ARTICLE XI. Ownership of Results and Industrial & Intellectual Property Rights

11.1 Any manufacturing techniques or processes or any know how, in the broadest sense, invented and/or developed under this Agreement shall be owned as follows. If relating (i) to the Application and manufacturing processes related to the Application, the Technical Documentation, Systems, Vystar Technology, and resulting processes, components, manufacturing processes and SOPs or other Vystar Confidential Information shall be Industrial Property Rights or other intellectual property rights owned by Vystar (“Vystar Owned Property”; (ii) to manufacturing processes of compounded latex and prevulcanized lattices not relating to the Application, Revertex Technology, and resulting processes, components, manufacturing processes and SOPs or other Revertex Confidential Information shall be Industrial Property Rights or other intellectual property rights owned by Revertex (“Revertex Owned Property”). All of the Technology owned individually by either Vystar or Revertex, as defined herein, shall be prosecuted by that party individually in their sole individual discretion.

11.2 All Improvements made to, which shall include derivative works made from, the individually owned Technology, being either Vystar Owned Property or Revertex Owned Property (“Owning Party”), the corresponding Technical Documentation, Systems, Application or products by one or more employees or contractors of the non-Owning Party shall be works for hire and shall remain the exclusive property of the Owning Party as part of the Owning Party’s Confidential Information.

11.2.1 Such Owning Party Improvements shall become subject to this Agreement; and

11.2.2 The expenses and costs in procuring and maintaining the intellectual property protection for the Improvements shall be the responsibility of the Owning Party, who shall determine whether to apply for patent or other appropriate protection and, if so, which party shall prepare and prosecute such application and in which countries corresponding applications shall be filed and by whom.

11.3 During the term of this Agreement, the non-Owning Party shall notify the Owning Party of Improvements it or one of its contractors has made to the Owning Party’s Technology. The non-Owning Party and/or its contractors, and their employees, representatives and contractors shall cooperate fully with the Owning Party in preparing, prosecuting, and otherwise securing such intellectual property protection. Expenses of preparing, prosecuting and otherwise securing such intellectual property protection shall be borne by the Owning Party.

11.4 All results obtained by any of the tests carried out shall be vested in the Owning Party, as defined herein, and the Owning Party may use such results without any restriction.

11.5 If a Party becomes aware that the Products infringes upon an Intellectual Property Right of a third party, it will promptly notify the other Party thereof in writing. In such event, each Party will do everything possible to cure the Products from a potential infringement in order to avoid as much as possible an infringement suit. In case an infringement suit is nevertheless instituted by a third party against one or both of the Parties, each Party will equally participate in any and all costs for the defense thereof. If the other Party does not respond favorably to the registered letter within thirty (30) days after the date it has been sent, the initiating Party will have the right to bring a claim or legal action against such infringing entity in such country, the costs and proceeds of which will be borne and recovered by that initiating Party solely.

11.6 In case a counterclaim relating to the Products is instituted against the initiating Party, it will immediately inform the other Party thereof by registered letter or courier with signature evidencing delivery mentioning all details relating to such counterclaim. In such case, the initiating Party will make available to the other Party any defense in such counterclaim and the other Party will have the right to join the initiating party in the claim or legal action at any time possible and/or to participate in the defense of the counterclaim. Any participation and/or observations will be taken into account by the initiating Party in as far as reasonable. In the event that the other Party joins the initiating Party, the costs and proceeds will be handled as if the parties had jointly brought the claim or legal action.

11.7 No settlement by the initiating Party will diminish the rights or interests of the other Party in the Products without the other Party’s prior and explicit written consent.

ARTICLE XII. Health Hazards and Insurance

12.1 In the event that in the course of implementation of the Development or any of the Licensed Activities any employee of Revertex has suffered damage to his/her health caused by or in connection with the Products, Revertex shall take immediate necessary actions and promptly notify Vystar to that effect, and both parties shall discuss and determine necessary matters including the determination as to whether or not the scheduled test shall continue to be carried out.

12.2 Revertex shall maintain and keep in force during the term of this Agreement premises, workers’ compensation, general public liability insurance and any other insurance against any insurable claim which might or could arise regarding the development, manufacturing and packaging or any of the Licensed Activities of the Products. Revertex shall add Vystar as an additional insured on Revertex’ insurance policies, and shall provide Vystar with a copy of such. Revertex shall notify Vystar immediately upon any modification, termination or expiration in coverages.

ARTICLE XIII. Indemnification

13.1 Each Party (the “Indemnifying Party”) shall defend, indemnify and hold harmless the other Party (the “Indemnified Party”) and its parent, sister and subsidiary companies, affiliates, directors, supervisors, officers, employees, agents, representatives and consultants (“Indemnified Persons”) from and against any and all claims, actions, damages, fines, losses, expenses, costs (including without limitation reasonable attorneys’ fees and litigation or arbitration costs) or other liability incurred by the Indemnified Party and Indemnified Persons, arising out of or relating to any allegation of or actual breach of any: (1) term or condition of this Agreement; (2) any representation, warranty or covenant of the Indemnifying Party under this Agreement; (3) any negligence or willful misconduct; (4) any claims of damages by any third party resulting from any act or omission of the Indemnifying Party; and/or (5) any infringement or violation by the Indemnifying Party of any third person’s intellectual property rights arising as a result of the Indemnifying Party’s entering into and/or performance of or attempt to perform this Agreement and/or (6) any violation of the Regulatory Requirements. Provided that the Indemnified Party shall provide to the Indemnifying Party prompt written notice of any such claim for which indemnification is sought and shall further provide reasonable cooperation in the defense and all related settlement negotiations thereof. The Indemnifying Party shall have the sole right to control the defense of a claim for which indemnification is sought hereunder. Notwithstanding any of the foregoing, the Indemnified Party shall have the right, in its absolute discretion and at its sole cost, to employ attorneys of its own choice in the defense of such claim. Neither Party shall have any liability for claims arising out of the other Party’s use of the Technology, the Technical Documentation, the Systems, and/or the Products not authorized by this Agreement or with any changes not approved by the other party.

13.2 Each Party shall bear all costs and expenses incurred in relation to any claim or cause of action due to that Party’s own misconduct or negligence.

13.3 Where such injury, death, loss or damage is the result of the joint or concurrent negligence or misconduct of both Revertex and Vystar or their respective agents, employees, representatives, or contractors, Revertex’s duty of indemnification shall be reduced in the same proportion attributed to the negligence or misconduct of Vystar, its agents, contractors, employees or representatives.

ARTICLE XIV. Term & Termination

14.1 Term. This Agreement shall become effective on the Effective Date and shall remain in full force and effect for three (3) years from the Effective Date, unless and until earlier terminated hereunder or unless modified by any term provision in the Plan or Confirmation. This Agreement shall be renewable for successive 2-year terms upon mutual agreement of the Parties ninety (90) days prior to each previous term’s expiration.

14.2 Termination without Cause. Either Party may terminate this agreement upon one hundred twenty (120) days notice to the other Party.

14.3 Termination with Cause. Unless otherwise provided by law, either Party may terminate this Agreement in the event that the other Party breaches any provision of this Agreement after the non-breaching party serves the breaching party with a notification specifying a reasonable period of time, but in no case less than ten (10) days, during which the breach shall be remedied and, if the breaching party fails to remedy the breach within the specified period, the non-breaching party may terminate this Agreement and/or the then effective Plan and Confirmation and may claim from the breaching party direct and ordinary damages resulting from the termination. This liability for damages shall not apply to indirect, special, incidental, consequential or any other damages than the direct or ordinary damages.

14.4 Termination Upon Occurrence of Events. Either Party hereto may immediately terminate this Agreement upon delivering notice to the other party if any of the following events occurs:

14.4.1 Thirty percent (30%) or more of the assets of the other party becomes subject to attachment, provisional attachment, provisional disposition, public sale, procedures for tax delinquency, petition for an auction sale, or any other sanctions imposed by public authorities;

14.4.2 A petition is filed by or against the other party for the institution of proceedings for corporate arrangement, civil rehabilitation or special liquidation, or for bankruptcy, which is not dismissed within thirty (30) days;

14.4.3 An order is issued by a competent regulatory agency to suspend the business of, or revoke the business license or business registration of, the other party that is related to this Agreement;

14.4.4 The other party becomes unable to make any payment or becomes insolvent, or the financial standing of the other party has otherwise seriously deteriorated, or there is a reasonable ground to suspect the deterioration and acceptable reassurances have not been given after twenty (20) days notice of such suspicions.

14.5 Upon the termination of this Agreement Revertex shall cease to use any of the Technology, Systems, Products, Application or Technical Documentation, unless otherwise authorized by Vystar, and shall promptly return to Vystar all information, Technical Documentation (including copies thereof) and the remaining sample substance of the Application or any Product.

14.6 Notwithstanding the foregoing, the termination of this Agreement shall not relieve either Party of any liability or obligation accrued prior to such termination, and such termination shall not affect any provision, which shall be effective after such termination as stipulated or implied herein. The exercising of its rights in this Article XIV by either Party shall not impair the exercising of other rights of such Party pursuant to provisions of law or herein, including, but not limited to the right of the terminating party to claim damages.

ARTICLE XV. Force Majeure

15.1 Notwithstanding any provisions herein, no Party shall be held liable or responsible to the other Party for failure or delay in fulfilling or performing any obligation under this Agreement if such failure or delay is caused by actions, inactions or events which are beyond the reasonable control of the affected Party, the effect of which is to prevent or interfere with such Party’s performance hereunder, including but not limited to any weather; natural disasters; government action or inaction or other governmental laws, orders, restrictions, embargos or blockades; war; national or regional emergency; city riot or other civil disobedience; revolution or rebellion; strike or other work stoppage; fire; explosion; flood; sabotage; pestilence; accident or breakdown of machinery, unavailability of fuel, labor, containers or transportation facilities; accidents of navigation or breakdown or damage of vessels, or other conveyances for air, land or sea or other impediments or hindrances to transportation; or any other circumstances of like or different character commonly referred to as an act of God or force majeure. Each Party agrees to give the other Party prompt written notice of the occurrence of any such condition and shall make all reasonable efforts to perform despite such occurrence. In the event of that such condition continues for more than three (3) months, the Parties may consult with each other to determine whether or not to terminate this Agreement.

15.2 Notwithstanding the aforesaid, the Parties shall perform obligations stipulated herein as soon as possible after the end of such force majeure.

ARTICLE XVI. Jurisdiction

Vystar and Revertex agree that any disputes arising out of or in connection with this Agreement shall be governed by Georgia law in the United States of America (“U.S.A.”) and submitted into a court of competent jurisdiction in Atlanta, Georgia, U.S.A..

ARTICLE XVII. Matters subject to Discussion/Entire Agreement/Amendment

This Agreement, along with its Schedules, Plans and Confirmations constitutes the entire understanding between the Parties, and supersede all previous undertakings, agreements, and understandings, whether oral or written, between the Parties hereto. No modification, amendment or alteration of this Agreement shall be effective unless agreed to in writing signed by both Parties. Any matters not provided for in this Agreement or any doubts arising in connection with the interpretation of this Agreement shall be resolved through good faith discussions between the parties hereto.

ARTICLE XVIII. Notice

All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered by hand or by registered return mail to:

In case of Vystar :

William Doyle

President & COO

3235 Satellite Blvd.

Building 400, Suite 290

Duluth, GA 30096

Phone: +1 770-965-0383

Fax: +1 770-965-0162

In case of Revertex

__ Revertex (M) Sdn. Bhd. __

_______________________

Attn: Chong Yee Ming __

Phone: + 607-770-1300 ____

Fax: +__ 607-776-7062 ____

Provided, however, that if a Party shall have designated a different address by notice to the other Party, then to the last address so designated. Either Party may change its address by giving written notice to the other Party.

ARTICLE XIX. Relationship of the Parties/No Third-Party Beneficiaries

19.1 The relationship between Vystar and Revertex is that of independent contractors with respect to all matters related to this Agreement. Each Party agrees that discretionary authority over all significant business matters with respect to the other Party and its Technology rests with the owning Party, and the non-owning Party shall have no authority, whether express or implied, to make contracts, representations, warranties or any other obligations in the name of, or binding upon, the owning Party. Neither Party shall be responsible for the other Party’s acts .

19.2 This Agreement is made for the benefit of the Parties hereto and is not intended to benefit any third parties and shall not be available for enforcement or benefit of any third parties not a Party to this Agreement as evidenced by a duly authorized signature hereto.

ARTICLE XX. Severability

If a court or arbitrative panel of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable, the provisions of this Agreement shall be separable and such invalid or unenforceable term(s) shall be ineffective in the affected jurisdictions to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement. The remaining provisions of this Agreement and the invalidated provisions in other non-affected jurisdictions shall remain in full force and effect until the Agreement terminates or expires.

ARTICLE XXI. Waiver

The waiver by either Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of that particular provision or any other provision on the Agreement. Failure by any Party at any time to enforce any of the provisions of this Agreement shall not affect or impair such provisions in any way, or the right of any Party at any time to avail itself of any remedies it may have for breach of such provisions pursuant to this Agreement, either in equity or in law.

Article XXII Taxes

22.1 Vystar shall reimburse Revertes for any existing taxes which Revertex may be required to pay upon the production, transportation, delivery, use, possession or storage of the Products, but not taxes upon, or measured by, the income of Revertex or the Raw Materials. Vystar shall provide Revertex, upon request, with properly completed exemption certificates for any tax from which Vystar claims an exception.

22.2 Unless it elects otherwise, Vystar shall reimburse Revertex for any new taxes or increase in existing taxes which Revertex may be required to pay upon the production, transportation, delivery, use, possession or storage of the Product (other than taxes upon, or measured by, the income of Revertex or the Raw Materials) if Revertex provides Vystar with written notice of such new or increased tax. However, within thirty (30) days after receiving such written notice from Revertex, Vystar may elect by written notice to Revertex not to reimburse Revertex, in which event Revertex may terminate this Agreement upon written notice. If Vystar does not give written notice of its ele tion not to reimburse Revertex, Vystar shall reimburse Revertex for such new or increased taxes.

22.3 Notwithstanding the above, Vystar shall render all of its property stored or retained at Revertex’ facilities to the appropriate government authorities for the purposes of determining any personal property tax that may be assessed against such property. Vystar shall pay any personal property tax assessed against its property directly to the appropriate government authorities.

ARTICLE XXIII. Parts

This Agreement may be executed in two (2) or more counterparts, which together shall form a single agreement as if both Parties had executed the same document.

ARTICLE XXIV. S urvival

The following Sections and Articles shall survive the termination of expiration of this Agreement: Jurisdiction Article XVI, Effect of Termination Section 14.5, Indemnification Article XIII, Ownership Article XII, Confidentiality Article X, Records Retention Section 8.5, No Warranties Article VII, and Audit Section 8.7.

In witness hereof, the Parties hereto have caused this Agreement to be executed in duplicate with their respective names and seals affixed thereto, and each Party shall retain one copy thereof.

Date: April 11, 2008

Vystar Corporation

Signature: /s/

Name:

Title:

Date:

Revertex:

Signature: /s/

Name:

Title:

Date:

EXHIBIT A

PLAN

CONFIDENTIAL

VYTEX Ô NRL SOP

Preparation of Vytex Ô Natural Rubber Latex from Field Latex

Authors: Travis Honeycutt, Matt Clark, Vystar Corporation

1.0 INTRODUCTION

1.1 Purpose

The purpose of this procedure is to describe a means of chemically reducing the antigenic protein (AP) level in natural field rubber latex without diminishing the physical properties of the latex.

1.2 Procedure

This procedure is performed prior to concentration. The beginning feedstock is field latex, containing approximately 27% total solids content (TSC) prior to de-sludging.

1.3 Results

The protein results of this procedure are to be determined by Donald Guthrie Foundation Education Research Institute, an independent laboratory analysis using the ASTM D6499-03 Inhibition ELISA protocol. Once the aging process is completed, as proscribed in Section 4.2, a sample of the batch should be sent within three (3) days to the following address for protein testing:

LEAP Testing Service

c/o Donald Guthrie Foundation for Education & Research Inc

Attn: Dr. David Kostyal

One Guthrie Square

Sayre, Pennsylvania 18840

Phone: (570) 882-4645

Fax: (570) 882-4666 or 882-5151

E-mail: LTS@guthrie.org

2.0 PREPARATION OF CHEMICALS TO TREAT 1 KG OF FIELD LATEX (

***********************

3.0 MIXING & CENTRIFUGING of VYTEX Ô NATURAL RUBBER LATEX

***********************

************* THESE PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

4.0 CONCLUSION & DISCUSSION

4.1 A charged surfactant is mixed with the natural rubber latex emulsion and stirred to extract or ‘wash’ the proteins from the cisisoprene micelles. The surfactant acts on the protein molecules through van der Waal forces or weak hydrogen bonding to bring the protein into the hydrophilic phase. Excess surfactant is used to keep the micelles suspended in the hydrophilic phase. Meanwhile, insoluble aluminum hydroxide is added to the emulsion which captures the proteins with electron pair sharing bonding. The resultant insoluble complex is separated from the emulsion by centrifuging or filtration.

4.2 Similar to existing practices by processors of latex, Vytex NRL should be stored for 21 days for maturation purposes prior to distribution. Further, the Certificate of Analysis (COA) that will accompany every Vytex NRL, as described in the Services of Exhibit D, should only include test results taken immediately after the 21 day maturation process. An example of the COA is attached for reference. The following is a list of parameters with definitions for completion;

Date Issued: The initial starting date of the production run. This should be listed by month & day and year. For example- February 2, 2008

Lot#: The lot # is defined by the month, day, and last two digits of the year. Also noted will be the trial run. For example- 020208/12

Product Name: The product name will always be defined as Vytex™ NRL

Customer: The customer will define the recipient of Vytex NRL. For example- Regent Hospital Products Sdn Bhd

Address: The address will reflect the destination of the Vytex NRL material. For example- Lot 9, Lorong Perusahaan 4, Kulim Industrial Estate 09000 Kulim, Kedah Darul Aman, Malaysia

The test result for each property measured should be the median value of at least three samples measured per property.

Certificate of

Vytex Ô Natural Rubber Latex (NRL)

DATE ISSUED: February 2, 2008

LOT #:	020208/12

PRODUCT NAME:	VYTEX ^TM NRL

CUSTOMER:

ADDRESS:

Properties Measured and Units of Measurement	Test Date	Test Method	Test Result		Specification
TSC (%)	2-25-08	ISO 124		60.40		60-62
Alkalinity (%)	2-25-08	ISO 125		0.71		0.60-0.80
VFA no.	2-25-08	ISO 506		0.016		0.070 Max
Viscosity, cPs (sp 2/60)	2-25-08	ISO 1652		62.5		20-100
Mechanical Stability Test (MST)	2-25-08	ISO 35		1,800		800-2,500
Coagulum (mesh# 80) ppm	2-25-08	ISO 706		35		100 Max
pH	2-25-08	ISO 976		10.87		10-11.5

We certify that we have tested a representative sample from the above product. All tests are carried out in accordance to the following stated QC Test Methods based on relevant standards.

All the test samples were prepared in accordance to Sampling Method ISO 123.

The measurement of uncertainty of the tests is available upon request.


Approved Signatory

Name

Designation

Vystar Corporation • 3235 Satellite Boulevard, Bldg.400, Ste. 290 • Duluth, GA 30096 • V 770.965.0383 • F 770.965.0162 • www.vytex.com

EXHIBIT B

TRADEMARKS

Revertex shall place the following trademark label on all packaging and/or bills of lading shipping the Vytex™ NRL. The size of this label shall be appropriate for the size of the packaging. For example, for sample-sized shipments, the label shall be no smaller than 4 inches by 6 inches. For 55 gallon drum-sized shipments, the Vytex label shall be no smaller than 8 inches by 12 inches. Vystar shall provide Revertex with the graphics for such labeling.

If the Vytex order is in a larger sized vessel than a 55-gallon drum, the Vytex label shall be placed on the bill of lading accompanying that shipment. The Vytex trademark label on the bills of lading shall be no smaller than 2 inches by 3 inches.

Revertex shall also comply with the following additional usage requirements:

The Vytex logo must be present on all Vytex NRL products and samples.

Revertex must not obstruct the Vytex logo by placing any other elements either on or too close to the logo.

The Vytex oval shape must not be used as a decorative element.

Revertex must not add any trademark symbol to any of the Vytex or other Vystar products or in conjunction with the Vytex or Vystar logos that do not already appear there from Vystar.

Revertex may only use the Vystar and Vytex logo or oval symbol in connection with the packing and shipping of Vytex consistent with the terms in this Manufacturing Agreement.

Revertex may use the Vystar and Vytex trademarks only as provided for herein unless expressly approved in writing by Vystar.

The following is the Vytex logo.

Vytex™ is a trademark of Vystar Corporation, Duluth, Ga

The following is the Vytex logo as it should be used on product labeling.

Vytex™ NRL

Production Date: _________

Vytex™ is a trademark of Vystar Corporation, Duluth, Ga

EXHIBIT C

FEES

The Fees shall be all-inclusive for the Services, as described in this Agreement and as listed in Exhibit D. The Fees shall be calculated initially* as follows:

1. ***************, plus

2. ***************, plus

3. ***************, plus

4. ***************.

* With an increase in volume of Vytex NRL toll manufacturing, the parties shall negotiate a volume discount schedule.

************* THESE PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

EXHIBIT D

REVERTEX SERVICES

The Revertex Services shall include all activities required to follow the procedures outlined in the Plan and SOP as described in Exhibit A and in the Agreement generally. Without limiting the foregoing, the Services shall include the following:

Procurement of all raw materials and raw latex required to manufacture the Vytex™ NRL, as described in the Plan and SOP attached hereto as Exhibit A.

Mixing of all materials required to required to manufacture the Vytex NRL.

Centrifuging of the NRL and the Vytex NRL mixture after application of the Vytex process and chemicals pursuant to the SOP in Exhibit A.

Holding and Aging of the Vytex NRL mixture.

Storing Vytex NRL.

Testing each batch and/or lot of Vytex NRL and providing a Certificate of Analysis (“COA”) in triplicate with the standard parameters. Revertex shall: (i) send 1 copy of the COA to Vystar upon completion of the testing, (ii) keep 1 copy for the required record retention period (no less than 10 years) and shall send the 3 ^rd copy to the customer designated for that batch and/or lot number as prescribed by Vystar.

Packaging the Vytex NRL for shipment.

Arranging for and putting into the hands of the common carrier mutually agreed to by the parties.

Notifying Vystar on a periodic basis agreed to by the parties of the status of manufacturing, inventory and shipment, and as otherwise requested by Vystar.

10.

Submitting the reports to Vystar on the manufacturing process and test results as requested by Vystar on the intervals mutually agreed to by the parties, but in no event less than quarterly.

11.

Participating in periodic conference calls and/or meetings to review the Services and experiences.

12.

Participate in and be available for communications with Vystar clients and prospective clients on specifications and other discussions regarding Vytex NRL.

13.

Other services as mutually agreed to by the parties.

EXHIBIT E

MATERIAL SAFETY DATA SHEETS

EXHIBIT F

REVERTEX STORAGE FACILITIES DESCRIPTION

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) made and entered into on this 11 ^th day of November, 2008 (the "Effective Date"), by and between Vystar Corporation, a Georgia corporation (the "Company"), and William R. Doyle, a resident of the State of Georgia ("Employee").

In consideration of the employment by the Company and of the compensation and other remuneration paid, and to be paid, by the Company and received by Employee for such employment, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by Employee, it is agreed by and between the parties hereto as follows:

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings specified below:

" Business " - the research, development, manufacturing, marketing, distribution, licensing and offering of products, services and technologies offered by the Company as of the Effective Date and as may be offered by Company during the term of this Agreement, including all renewals. Such products, services and technologies include, but are not limited to, marketing, selling, distributing and developing natural rubber latex (NRL) raw material and related products and services to processors, manufacturers, distributors and other parties who use and/or purchase NRL as a raw material and/or who manufacture products using NRL.

“Competitor” - means any Person (as defined herein) offering, selling, distributing, processing, developing, licensing or manufacturing NRL and related products, services and technologies to or for processors, manufacturers, distributors and other parties who use, manufacture, process and/or purchase NRL raw material and/or who manufacture end products using NRL raw materials or a synthetic alternative to NRL in competition with Company or any of its subsidiaries .

" Confidential Information " - information relating to the operations, customers, or finances of the Company, or the Business, that derives value from not being generally known to other Persons, including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, and lists of or identifying information about actual or potential customers or suppliers, including all customer lists, whether or not reduced to writing, certain patented and unpatented information relating to the research and development, manufacture or serving of the Company's products, information concerning proposed new products, market feasibility studies and proposed or existing marketing techniques or plans, and all information defined as a “Trade Secret” pursuant to the Georgia Trade Secrets Act or otherwise by Georgia law. Confidential Information also includes the same types of information relating to the operations, customers, finances, or Business of any affiliate of the Company, if such information is learned by Employee during the term of this Agreement or in connection with Employee's performance of Services, as defined herein. Con-fidential Information also includes information disclosed to the Company by third parties that the Company is obligated to maintain as confiden-tial. Confidential Information may include information that is not a Trade Secret, but Confiden-tial Information that is not also a Trade Secret shall constitute Confidential Information only for five (5) years after the Termination Date. Confidential Information does not include information generally available to the public through no violation of a confidentiality or non-disclosure obligation owed to Company;

" Customer " - any customer of the Company in the Territory that Employee, during the term of this Agreement, (i) provided goods or services to or solicited on behalf of the Company; or (ii) about whom Employee possesses Confidential Information;

" Person " - any individual, corporation, partnership, limited liability company, association, municipality, government agency, government, unin-corporated organization or other entity;

" Services " - the duties and functions that Employee shall provide in the Territory as an employee of the Company and as further outlined on Exhibit B;

" Termination Date " - the last day Employee is employed by the Com-pany, whether the termination is voluntary or involuntary and whether with or without cause;

“Territory” - shall be the geographic region in which Employee initially and/or within the last eighteen (18) months during the term of this Agreement provides the Services. Territory shall be more fully described in Exhibit B along with Employee’s description of Services.

2. Employment: The Company agrees to employ Employee and Employee agrees that Employee will devote Employee’s full productive time, skill, energy, knowledge and best efforts during the period of Employee’s employment to such duties as the Board of Directors of the Company may reasonably assign to Employee, and Employee will faithfully and diligently endeavor to the best of Employee’s ability to further the best interest of the Company during the period of Employee’s employment. However, Employee is not prohibited from making personal investments in any other businesses, as long as those investments do not require Employee to participate in the operation of the companies in which Employee invests and such other businesses are not in competition with the Company or any of its subsidiaries (“Competitor”). Employee may invest in any publicly traded company registered on a bona fide stock exchange without reservation.

3. Terms of Employment: Employee's employment pursuant to this Agreement will begin on the 1 ^st day of November, 2008, and will continue uninterrupted unless terminated by either party pursuant to the Termination Section herein. This Agreement shall supersede all terms of employment previously executed and existing prior to the execution of this Agreement.

4. Compensation: On the terms and subject to the conditions of this Agreement, (i) the Company will pay Employee a salary and a bonus determined in accordance with Exhibit A, (ii) Employee will be entitled to participate in the Company’s 2004 Long-Term Incentive Compensation Plan (“Stock Option Plan”), or such other employee stock option plan as may be in effect from time to time, and (iii) the Company will provide Employee with employee benefits consistent with those provided by the Company to similarly situated executives. The employee benefits provided by the Company as of the date hereof shall also be distributed to Employee. The Company reserves the sole and unilateral right to modify any and all employee benefits at any time in its sole discretion.

5. Title, Duties and Conduct of Employee: The Employee’s initial title shall be President, Chief Executive Officer, and Chairman of the Board, and shall report to the Board of Directors of Company. Employee shall perform such duties and functions for the Company as shall be specified from time to time by the Board of Directors of the Company, including, but not limited to the duties and functions expressly set forth on Schedule B, and which are consistent therewith (“Services”).

a. Disparagement. Employee shall not at any time make false, misleading or disparaging statements about the Company, including the Business, management, employees and/or Customers.

b. Prior Agreements. Employee represents and warrants that Employee is not under any obligation, contractual or otherwise, limiting, impairing or affecting Employee's performance of Services. Upon execution of this Agreement, Employee shall give the Company any agreement with a prior employer or other Person purporting to limit or affect, in any way, Employee's ability to work for the Company, to solicit customers or potential customers or employees or to use any type of information.

c. Confidential Information. Employee shall protect Confidential Information. Except as required in connection with work for the Company, Employee will not use, disclose or give to others, during or after Employee's employment, any Confidential Information.

d. Compliance with Company Policies and Laws. At all times while performing Services, Employee shall comply with all laws and regulations applicable to Employee and/or Company. Employee shall at all times comply with all Company policies and procedures. Failure to comply with this Section shall be grounds for Termination For Cause, as described in Section 9 Term and Termination.

6. Illness or Incapacity: Employee is entitled to paid-time off and absence from Employee’s duties during regular work hours for any reason for a total of four (4) weeks each calendar year (“PTO”). If Employee cannot perform his/her duties because of major illness or incapacity for more than a total of ninety (90) days in any year, the Company may terminate this Agreement upon thirty (30) days' written notice to Employee. Employee is not entitled to receive, and the Company shall not be required to pay, Employee's compensation hereunder for absences because of major illness or incapacity other than the total of ninety (90) days in each year granted to Employee under this Section 6.

7. Ownership of Information

a. Work For Hire Acknowledgment; Assignment. All writings, draw-ings, photographs, tapes, recordings, strategies, formulas, operating procedures, patents, product developments, computer programs and other works in any tangible medium of expression, regardless of the form of medium, which have been or are prepared by Employee, or to which Employee contributes, in connection with Employee's employ-ment by the Company, whether patented, copyrighted, trademarked or otherwise (collectively the "Works") and all copyrights, patents, trademarks and other rights in and to the Works, belong solely, irrevocably and exclusively throughout the world to the Company as works made for hire. However, to the extent any court or agency should conclude that the Works (or any of them) do not constitute or qualify as a "work made for hire," Employee hereby assigns, grants and delivers, solely, irrevocably, exclusively and throughout the world to the Company all ownership and other rights to the Works. Employee also agrees to cooperate with the Company and to execute such other further grants and assignments of all rights as the Company from time to time reasonably may request for the purpose of evidencing, enforcing, filing, registering or defending its ownership of the Works and the copyrights in them, and Employee hereby irrevoca-bly constitutes and appoints the Company as Employee's agent and attorney-in-fact, with full power of substitu-tion, in Employee's name, place and stead, to execute and deliver any and all such assignments or other instruments which Employee shall fail or refuse promptly to execute and deliver, this power and agency being coupled with an interest and being irrevo-cable. Without limiting the preceding provisions of this Paragraph 7(a), Employee agrees that the Company may edit and otherwise modify, and use, publish and otherwise exploit, the Works in all media and in such manner as the Company, in its discretion, may determine.

b. Inventions, Ideas and Patents. Employee shall disclose promptly to the Company (which shall receive it in confidence), and only to the Company, any invention or idea of Employee (developed alone or with others) conceived or made during Employee's employment by the Company (or, if related to the Business, during employment or within one year after the Termination Date). Employee assigns to the Company any such invention or idea in any way connected with Employee's employment or related to the Business, research or development of the Company, or demonstrably anticipated research or development of the Company, and will cooperate with the Company and sign all papers deemed necessary by the Company to enable it to obtain, maintain, protect and defend patents covering such inventions and ideas and to confirm the exclusive ownership of the Company of all rights in such inventions, ideas and patents, and irrevoca-bly appoints the Company as its agent to execute and deliver any assignments or documents Employee fails or refuses to execute and deliver promptly, this power and agency being coupled with an interest and being irrevocable. This constitutes written notification to Employee that this assignment does not apply to an invention for which no equipment, supplies, facility or Trade Secret information of the Company or any Customer was used and which was developed entirely on Employee's own time, unless (a) the invention relates (i) directly to the Business or (ii) to the actual or demonstrably anticipated research or develop-ment of the Company, or (b) the invention results from any work performed by Employee for the Company.

8. Nonsolicitation; Noncompetition .

Non-Solicitation of Customers. During the term of this Agreement, and for one (1) year after the Termination Date, Employee will not solicit Customers within the Territory for the purpose of providing products or services comparable to those provided by the Business, except on behalf of the Company.

b.	Non-Solicitation of Company Employees. During the term of this Agreement and for one (1) year after the Termination Date, Employee will not solicit for employment with another Person anyone who is an employee of the Company.

Non-Compete. During the term of this Agreement and for one (1) year after the Termination Date, Employee will not provide services substantially similar to Services within the Territory to any Competitor. Employee shall be prohibited from providing in the Territory in competition with the Company in accordance with the terms of this Agreement, including the Services expressly set forth on Schedule B attached hereto. Employee acknowledges that Employee has been informed of and discussed with the Company the specific activities that Employee will perform as Services and that Employee understands the scope of the activities that constitute Services and the Territory under this Agreement. In exchange for entering into this noncompete during the one-year period after Termination of this Agreement, Employee shall be compensated as described in Effect of Termination, Section 9.c.

Future Employment Opportunities. Prior to and for one (1) year after the Termination Date, Employee shall (a) provide any employer with a copy of this Agreement, and (b) upon accepting any position, provide the Company with the employer's name and a description of the services, if any, Employee will provide for such employer.

9. Termination . At all times, Employee’s employment shall be subject to “employment at will”. This Agreement and the employment of Employee may be terminated as follows:

a. Without Cause . Either party may terminate this Agreement upon thirty (30) days notice to the other party.

b. For Cause.

(1) By the Company (i) pursuant to Paragraph 6 , (ii) upon conviction of the Employee of any felony or material misdemeanor under federal, state or local laws or ordinances, except traffic violations (iii) upon the failure of Employee to reasonably, diligently or competently discharge the duties assigned to him pursuant to this Agreement; (iv) if Employee engages in any act of dishonesty or bad faith with respect to the Company; (v) if Employee uses alcohol, drugs or other similar substances in a manner that adversely affects Employee’s work performance; (vi) Employee otherwise commits any act or crime reflecting unfavorably upon the Company or

(2) (i) By Employee upon thirty (30) days' written notice to the Company for any breach of this Agreement by Company and failure to cure within that thirty (30) day notice period; or

(3) By the Company upon any breach by Employee of any of the terms and conditions of this Agreement or the breach by Employee of any representation or warranty made to the Company herein or in any other agreement, document or instrument executed by Employee and delivered to the Company, or should any representation or warranty made by Employee hereunder or thereunder prove to have been false or misleading in any material respect when made or furnished; or

(4) Immediately by the Company upon the death or incapacitation of more than ninety (90) days of Employee.

c. Effect of Termination.

(1) In the event Employee is terminated by the Company without cause, the Company shall (i) pay Employee his then current salary and provide Employee with Group Health Insurance, but no other compensation or benefits, for six (6) months beginning with the date of termination (“Severance Payment”), and (ii) subject to the Employee's strict adherence to and performance of the covenants set forth in Paragraph 8, Company shall pay to Employee, an amount equal to seventy-five percent (75%) of Employee’s monthly salary amount for the one (1)-year period Employee remains obligated to the Non-Compete and Non-Solicitation covenants described in paragraph 8. If Employee is terminated for cause or Employee terminates this Agreement without cause, Employee shall be entitled only to compensation accrued through the date of Termination and all benefits accrued as of such date, and shall not be entitled to any Severance Payment described herein, but shall remain obligated to the Non-Compete and Non-Solicitation obligations.

(2) Return of Materials. On the Termination Date or for any reason or at any time at the Company's request, Employee will deliver promptly to the Company all materials, documents, plans, records, notes, manuals, subcontracts, procedures, customer lists, and any other papers and any copies thereof in Em-ployee's possession, custody or control relating to the Company or the Business, whether defined as Confidential Information, Trade Secret or otherwise, all of which at all times shall be the property of the Company.

10. Miscellaneous .

a. Assignability.

(1) This Agreement may be assigned by the Company to any successor in interest to its business, which successor in interest shall be bound herein to the same extent as the Company. Employee agrees to perform his duties for such successor in interest to the same extent as for the Company.

(2) This is a personal agreement on the part of Employee and may not be sold, assigned, transferred or conveyed by Employee.

b. No Waiver . The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party.

c. Governing Law and Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. Any cause of action shall be filed in and the parties agree to subject themselves to the jurisdiction of any State or Federal court of competent jurisdiction located in Atlanta, Georgia.

d. Entire Agreement . This Agreement states the entire agreement and understanding between the parties and supersedes all prior understandings and agreements.

e. No Modification . No change or modification to this Agreement shall be valid unless in writing and signed by both parties hereto.

f. Independence of Covenants . The covenants contained herein shall be construed as agreements independent of each other and of any other provision of this or any other contract between the parties hereto, and the existence of any claim or cause of action by Employee against the Company, whether predicated upon this or any other contract, shall not constitute a defense to the enforcement by the Company of said covenants.

g . Right to Injunctive Relief . Employee recognizes and agrees that the injury the Company will suffer in the event of the Employee's breach of any covenant or agreement contained herein cannot be compensated by monetary damages alone, and Employee therefore agrees that the Company, in addition and without limiting any other remedies or rights that it may have, either under his Agreement or otherwise, shall have the right to obtain an injunction against Employee from any court of competent jurisdiction enjoining any such breach without having to show or prove damages or injury.

h. Jury Trial Waiver . Both parties hereby waive their right to a trial by jury in the event of any dispute or cause of action regarding this Agreement.

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IN WITNESS WHEREOF , the undersigned have executed this Agreement as of the day and year first above written.

	VYSTAR CORPORATION

	By:
		(Signature)

	Name:	Joseph Allegra

	Title:	Director, Chair Compensation

	Date:

	EMPLOYEE:

		(Signature)

	Name:	William R. Doyle

	Date:

Schedule A - Salary and Bonus

Annual Salary. $185,000 , which may be amended from time to time by the Board. The Salary shall be payable bi-weekly according to the Company’s established payroll periods. The Board and Employee shall review the Annual Salary amount annually upon Employee’s Annual performance review that determines Employee’s Annual Bonus discussed below.

Bonus.

Annual Bonus. Employee shall be eligible each year of the term of this Agreement for a cash bonus equal to a maximum of 125% of Employee’s Annual Salary amount based on the success of the Company in meeting its objectives, as set out for Employee; provided that no cash bonus shall be payable to Employee on any date unless Employee is employed by the Company on that date. The amount of the Annual Bonus shall be determined by the Board based on the percentage of achievement of the stated Company objectives. Notwithstanding, if Company does not meet at least 90% of its stated objectives, the Board may choose not to award Employee any portion of his Annual Bonus. The effective date of Annual Bonus calculation shall be the Company Fiscal Year-End, and shall be payable in one or more installments as determined by the Board beginning in the first quarter of the following Fiscal Year.

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Schedule B - Duties and Functions (“Services”)

Services: Oversee and promote all aspects of the Company business. This shall include, but not be limited to: (i) having all operations, marketing, finance, sales, distribution and research and development functions report to Employee; (ii) mentoring and guiding all employees in the management and furtherance of the Company objectives.

Territory: Worldwide

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MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (“Agreement”) is dated January 31, 2008 (“Effective Date”) by and between UNIVERSAL CAPITAL MANAGEMENT, INC. , a Delaware corporation (“ Manager ”), and VYSTAR CORPORATION, a Georgia corporation ( “VYSTAR” or “Company” ) .

BACKGROUND

VYSTAR desires to obtain from the Manager, and the Manager is willing and able to provide to VYSTAR, management services and other assistance in accordance with and subject to the terms and conditions set forth in this Agreement.

For and in consideration of the mutual benefits and covenants set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Appointment as Manager .

(a) VYSTAR hereby engages Manager to provide management services and other assistance in accordance with the terms of this Agreement. The Manager shall and hereby agrees to devote such time as is reasonably necessary to provide such services and assistance.

2. Scope of Services .

(a) Manager hereby agrees to provide to VYSTAR the following services (as amended from time to time, collectively, the “Services” ):

(i) Strategic Planning. Manager shall assist VYSTAR management in the strategic planning process to include but not be limited to analysis of potential markets, competition, product marketing approaches, pricing and future product utility.

(ii) Investment Banking Consultation and Investor Introduction Services . Manager is not registered at this time as a securities broker or dealer, and represents and warrants that such registration is not required. Manager further represents that it does not have an affiliation with any securities brokerage firm. As a result, the Company understands that, while the Manager will introduce the Company to qualified persons and/or institutions who indicate a serious interest in pursuing a possible financing transaction for the Company within the parameters established by the Company, the Manager will not be involved in conducting negotiations for the Company with any such persons, handling any funds or securities, or performing services that would constitute a business of effecting transactions in securities under applicable federal or state law. Manager further represents and warrants that it has not acted as a broker or finder in any other sale of securities and does not intend to participate in any distribution of securities after any transaction under this Agreement.

Manager will use its best efforts to assist VYSTAR in seeking and raising funding and in preparation for entering the public market, pursuant to the Manager letter attached hereto as Exhibit A. Manager will provide VYSTAR with various options and methods for attaining its investment banking and public market goals.

(iii) Investor Relations Services. Manager will introduce VYSTAR to qualified Investor Relations Manager(s) suitable for providing marketing and public relations services in the investor community on behalf of VYSTAR. At VYSTAR’S request, the Manager will co-ordinate investor relations and public relations services between VYSTAR the provider of such services.

3. Term and Termination .

(a) This Agreement shall be effective as of the Effective Date and, subject to the provisions of section (b) of this Section 3, shall terminate after three (3) months (the “ Term ”).

(b) Notwithstanding the provisions of subsection (a) of this Section 3, (i) Manager can terminate this Agreement at any time upon thirty (30) days’ notice to VYSTAR upon VYSTAR’s failure to pay the amounts required hereunder, and (ii) VYSTAR can terminate this Agreement after thirty (30) days’ notice to Manager of Manager’s material failure to fulfill its obligations hereunder and Manager’s failure to correct such failure during such time period.

4. Compensation .

Within thirty (30) days of the signing of this agreement VYSTAR shall pay Manager for the Services by delivering to Manager a Warrant attached hereto as Exhibit A, pursuant to a Warrant Purchase Agreement attached hereto as Exhibit B, to purchase up to One Million (1,000,000) Shares of the common stock of the Company at an exercise price of $0.01. The Warrant will be exercisable in whole or in part at or before 5:00 p.m. E.S.T. on January 31, 2013.

In addition, VYSTAR shall reimburse Manager for third party and out-of-pocket expenses actually and reasonably incurred by Manager as an adjunct to and as a supplement to Manager’s responsibility for performing the Services for which Manager is being paid compensation described herein, and which are approved in advance by VYSTAR; provided that expenses of Affiliates of Manager shall not be deemed third party expenses for purposes of this Section 4.

5. Non-Exclusive Contract . The Manager acts as adviser to other clients and may give advice, and take action, with respect to any such client which may differ from the advice given, or the timing or nature of action taken, with respect to VYSTAR.

6. Delegation and Assignment . With VYSTAR’s prior written consent, which consent shall not be unreasonably withheld or delayed, Manager may delegate all or part of its duties to perform Services hereunder; provided, that Manager’ costs associated with any duties so delegated shall not be deemed out-of-pocket expenses added to the price of Services pursuant to Section 4. Notwithstanding the foregoing, Manager shall be entitled to delegate all or any part of its duties to one or more of its Affiliates upon notice to VYSTAR; provided, however, that Manager and its designee Affiliate(s) shall be jointly and severally liable for performance of Manager’s obligations under this Agreement. VYSTAR shall not assign or subcontract its rights, duties, or obligations under this Agreement.

7. Confidential Information; Ownership .

(a) Each party shall treat as confidential all Confidential Information of the other party that comes to its knowledge through this Agreement. Each party shall take such steps to prevent disclosure of such Confidential Information to any third person as it would take in protecting its own proprietary or confidential information and shall not use any portion of such Confidential Information for any purpose not authorized herein. All Confidential Information of each party and any information containing a party’s Confidential Information shall at all times remain the exclusive property of that party.

(b) No party shall be under any obligations with respect to any Confidential Information:

(i) which is, at the time of disclosure, available to the general public;

(ii) which becomes at a later date available to the general public through no fault on the part of such party and then only after such later date;

(iii) which such party can demonstrate was in its possession before receipt from the other party; or

(iv) which is disclosed to such party without restriction on disclosure by a third party who has the lawful right to disclose such information.

8. Independent Contractor . Manager is and shall remain at all times an independent contractor of VYSTAR in the performance of all Services hereunder, and all persons employed by Manager to perform such Services shall be and remain employees solely of Manager and subject only to the supervision of Manager’s supervisory personnel. With respect to Manager’s employees providing services under this Agreement, Manager shall be responsible for the payment of all salaries and benefits and all income taxes, social security taxes, employment compensation taxes and other employment taxes and withholdings with respect to such employees and all fringe benefits program expenses, such as insurance costs, pension or retirement plans, vacation, sick leave and similar matters, with respect to such employees. Manager shall be entitled to determine which of its employees shall provide the Services.

9. Force Majeure .

(a) Neither party shall be liable for any loss or damage for delay or non-performance under this Agreement resulting from the operation of any applicable law, rule, ordinance or regulation of any governmental entity or regulatory agency, or from any requirement or intervention of civil, naval or military authorities or other agencies of the government, or by reason of any other causes whatsoever not reasonably within the control of such party, including, but not limited to, acts of God, war, riot, insurrection, civil violence or disobedience, blockages, embargoes, sabotage, epidemics, fire, strikes, lock-outs or other industrial or labor disturbances, lightning, hurricanes, cyclonic storms, explosions and delay of carriers; provided, that the affected party notifies the other party promptly of the occurrence of the cause and thereafter exerts reasonable commercial efforts to overcome the cause of prevention and hindrance and to resume performance; and provided, further, that the settlement of strikes, lock-outs and other industrial or labor disturbances shall be entirely within the discretion of the affected party, and the affected party shall not be required to make settlement of strikes, lock-outs and other industrial or labor disturbances by acceding to the demands of any opposing third party or parties when such course is unfavorable in the affected party’s judgment.

(b) If Manager’s performance under this Agreement is suspended or rendered impractical by reason of any cause covered by subsection (a) of this Section 9 (“ Force Majeure ”) for a period in excess of twenty (20) days, VYSTAR shall have either the right to terminate this Agreement with respect to the disrupted Services immediately upon written notice to Manager or require that the Agreement continue in force for that period of time beyond the Term that such Force Majeure condition existed during the Term without incurring any obligation by VYSTAR for additional payment for Services by Manager. An event of Force Majeure shall not otherwise limit amounts payable for Services rendered on or prior to the actual date of the event of Force Majeure.

10. Limitation of Liability . Notwithstanding any other provision of this Agreement to the contrary, Manager shall not be liable to VYSTAR by reason of any error of omission or commission, performance or failure to perform or delay in performing any Services under this Agreement, for special, incidental or consequential damages, suffered by VYSTAR beyond a refund to VYSTAR of all charges paid and/or shares issued by VYSTAR to Manager for the Services that caused such damages, unless Manager shall have committed gross negligence or willful misconduct. The provisions of this Section 10 shall survive termination of this Agreement.

11. Manager’s Investment Representations . Manager hereby represents and warrants to and with VYSTAR that:

(a) Manager will be acquiring the Shares for its own account as principal and not with a view to, or for sale in connection with, any distribution of all or any of such Shares. Manager hereby agrees that it will not, directly or indirectly, assign, transfer, offer, sell, pledge, hypothecate or otherwise dispose of all or any of such Shares (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any of such Shares) except in accordance with the registration provisions of the Securities Act of 1933 (the “Securities Act”) or an exemption from such registration provisions or any applicable securities laws.

(b) Manager (i) is knowledgeable and experienced with respect to the financial, tax and business aspects of the ownership of investments such as the Shares and of the business contemplated by VYSTAR and is capable of evaluating the risks and merits of acquiring the Shares and in making a decision to proceed with this investment, has not relied on any representations, warranties or agreements of VYSTAR or others, and (ii) can bear the economic risk of an investment in Shares for an indefinite period of time and can afford to suffer the complete loss thereof.

(c) Manager has evaluated the risks involved in investing in the Shares and has determined that the Shares are a suitable investment for Manager. Specifically, the aggregate amount of the investments the Manager has in, and Manager’s commitments to, all similar investments that are illiquid is reasonable in relation to Manager’s net worth, both before and after the acquisition of the Shares pursuant to this Agreement.

(d) Manager understands and acknowledges that the Shares have not been registered under the Securities Act or any state securities laws and are being offered and sold in reliance on exemptions provided in the Securities Act and state securities laws for transactions not involving any public offering and, therefore, cannot be resold or transferred unless they are subsequently registered under the Securities Act and such applicable state securities laws or unless an exemption from such registration is available. Manager also understands that VYSTAR does not have any obligation or intention to register the Shares for sale under the Securities Act or any state securities laws or of supplying the information which may be necessary to enable the Manager to sell Shares and that Manager has no right to require the registration of the Shares under the Securities Act, any state securities laws or other applicable securities regulations.

(e) Manager has no contract, understanding, agreement or arrangement with any person to sell, transfer or pledge to such person or anyone else any of the Shares which the Manager will acquire pursuant to this Agreement and that Manager has no present plans to enter into any such contract, undertaking, agreement or arrangement.

12. Definitions .

(a) “Affiliate” means, with respect to a Person, another Person who controls, is controlled by or is under common control with the first such Person.

(b) “Confidential Information” means any and all information of either party that might reasonably be considered confidential, secret, sensitive, proprietary or private. To the extent practical, Confidential Information shall be marked “proprietary” or “confidential.” Confidential Information shall include the following:

(i) data, know-how, formulae, processes, designs, sketches, photographs, plans, drawings, specifications, samples, reports, lists, financial information, studies, findings, inventions and ideas, computer programs and software, or proprietary information relating to either party or the methods or techniques used by either party;

(ii) data, documents or proprietary information employed in connection with the marketing and implementation of each party’s products, including cost information, business policies and procedures, revenues and markets, distributor and customer lists, and similar items of information; and

(iii) any other data or information obtained by either party during the term of this Agreement which is not generally known to and not readily ascertainable by proper means by third persons who could obtain economic value from its use or disclosure.

(c) “Control” means the ability, through stock ownership, contract, or otherwise, to control the business or officers of a Person.

(d) “Damages and Expenses” means costs, liabilities, and expenses incurred in investigating, defending, and paying settlements or judgments with respect to claims (including reasonable attorneys’ fees).

(e) “Holiday” means for purposes of this Agreement, a day, other than a Saturday or Sunday, on which national banks with branches in the Commonwealth of Pennsylvania are or may elect to be closed.

(f) “Person” means an individual or entity.

(g) “Shares” means shares of common stock of VYSTAR, par value $.0001 dollars per share acquired by Manager pursuant to this Agreement.

13. Miscellaneous .

(a) Indulgences, Etc . Neither the failure nor any delay on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

(b) Controlling Law . This Agreement and all questions relating to its validity, interpretation, performance and enforcement (including, without limitation, provisions concerning limitations of actions), shall be governed by and construed in accordance with the laws of the State of Delaware, notwithstanding any conflict-of-laws doctrines of any jurisdiction to the contrary, and without the aid of any canon, custom or rule of law requiring construction against the draftsman.

(c) Notices . All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received only when delivered (personally, by courier service such FedEx or by other messenger) against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below:

If to:

Manager

Universal Capital Management, Inc.

2601 Annand Drive, Suite 16

Wilmington, DE 19808

Attention: Michael D. Queen

If to:

VYSTAR CORPORATION

3235 Satellite Blvd.

Building 400, Suite 290

Duluth, GA 30096

Attention: William R. Doyle

In addition, notice by mail shall be sent by a reputable international courier (such as FedEx) if posted outside of the continental United States. Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this subparagraph for the giving of notice.

(d) Binding Nature of Agreement; No Assignment . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(e) Provisions Separable . The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

(f) Entire Agreement . This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except as herein contained. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

(g) Section Headings . The Section and subsection headings in this Agreement have been inserted for convenience of reference only; they form no part of this Agreement and shall not affect its interpretation.

(h) Gender, Etc . Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

(i) Number of Days . In computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and Holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or Holiday, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or Holiday.

IN WITNESS WHEREOF , the Parties hereto have executed this Management Agreement

VYSTAR Corporation	Universal Capital Management, Inc.


By: _______________________________	By: ____________________________
Name: William R. Doyle	Name: Joseph T. Drennan
Title: President and COO	Title: Vice President and CFO

VYSTAR CORPORATION

August 15, 2008

Mr. Michael Queen

Universal Capital Management, Inc.

2601 Annand Drive

Wilmington, DE 19808

Re:	Agreement regarding Issuance of 600,000 Shares of Vystar Corporation (“Vystar) Common Stock to Universal Capital Management, Inc. (“UCM”)

Dear Mike:

This letter will memorialize the agreement between Vystar and UCM with respect to certain services to be rendered by UCM to Vystar in connection with the proposed registration of the distribution of 600,000 shares of Vystar Common Stock described below to the UCM stockholders. In consideration of the services described below, on or about the effective date of a Vystar registration statement on Form S-1 which is contemplated to be filed later this year, Vystar shall issue to UCM 600,000 shares of its common stock as compensation for such services and, in accordance with the contemplated description in the Registration Statement, UCM shall distribute such shares to its stockholders on a record date to be determined. The services include the following:

Assistance in preparation of the S-1 Registration Statement and accompanying documents;

Assistance in locating appropriate market makers with respect to Vystar’s contemplated listing of its shares for sale on the OTC Bulletin Board;

Assistance with Vystar’s contemplated application with FINRA with respect to such OTC Bulletin Board listing; and

Assistance with the contemplated arrangements with a stock transfer agent with respect to the Vystar common stock following effectiveness of such registration statement.

Notwithstanding the foregoing, these shares will only be issued to UCM in the event that such registration statement is declared effective by the Securities and Exchange Commission.

If the foregoing is acceptable, please so indicate in the space provided below.


	Vystar Corporation

Date:	By:	/s/
		William R. Doyle

Agreed to as of this 15 ^th day of August, 2008:

Universal Capital Management, Inc.

By:	/s/
	Michael Queen

ADDENDUM TO MANAGEMENT AGREEMENT

THIS ADDENDUM TO MANAGEMENT AGREEMENT (“Addendum”) dated February 29, 2008 is by and between UNIVERSAL CAPITAL MANAGEMENT, INC. and VYSTAR CORPORATION This Addendum amends and modifies that certain Management Agreement dated January 31, 2008 between the parties hereto.

Paragraphs 3. and 4. of the Management Agreement entitled “Term and Termination” and “ Compensation” respectively, are deleted in their entirety and replaced with the following:

Term and Termination

(a) This Agreement shall be effective as of the Effective Date and, subject to the provisions of section (b) of this Section 3, shall terminate after one (1) year (the “ Term ”). The Term shall be automatically extended from year to year in the absence of ninety (90) days’ notice from one party to the other.

(c) Not withstanding any other provision of subsections (a) or (b) of this Section 3, Manager will earn Sixty-Five percent (65%) of the Compensation, Section 4, for the Agreement as of January 31, 2008.

Compensation

(c) Within thirty (30) days of the signing of this agreement Vystar shall pay Manager for the Services by delivering to Manager a Warrant, pursuant to a Warrant agreement attached hereto as Exhibit C, to purchase up to One Million (1,000,000) shares of the common stock of the Company at an exercise price of $0.01. If the Term of this Agreement extends beyond the its Term, VYSTAR shall pay for continuing Services hereunder by delivering five hundred thousand (500,000) additional Warrants to Manager on the anniversary of the Effective Date and each anniversary date thereafter during the term of this Agreement. , and

(b) A Warrant, pursuant to a Warrant agreement attached hereto as Exhibit B, to purchase up to Five Hundred Thousand (500,000) shares of the common stock, par value $.0001 of VYSTAR at an exercise price of $2.00. The Warrant will be exercisable in whole or in part at or before 5:00 p.m. E.S.T. on January 31, 2013.

In addition, VYSTAR shall reimburse Manager for third party and out-of-pocket expenses actually and reasonably incurred by Manager as an adjunct to and as a supplement to Manager’s responsibility for performing the Services for which Manager is being paid compensation described herein, and which are approved in advance by Vystar; provided that expenses of Affiliates of Manager shall not be deemed third party expenses for purposes of this Section 4.

All other provisions of the Management Agreement remain in full force and effect.

The Parties hereto have executed this Management Agreement as of the date first above written.

Vystar Corporation		UNIVERSAL CAPITAL MANAGEMENT, INC.


BY: __________________________		BY: _______________________
NAME: William R Doyle		NAME: Joseph T Drennan
TITLE: President & Chief Operating Officer		TITLE: Vice President

WARRANT PURCHASE AGREEMENT

January 31, 2008

Universal Capital Management, Inc.

2 601 Annand Dr., #16

Wilmington, Delaware 19808

Vystar Corporation , a Georgia corporation (the " Company "), hereby agrees with you as follows:

Concurrently with the execution of this Warrant Purchase Agreement (the “ Agreement ”), the Company is entering into with you a consulting agreement, of even date hereof. Pursuant to the terms of the consulting agreement, the Company will deliver to you a Warrant (the " Warrant ") in the form of Exhibit A hereto, to purchase up to One Million (1,000,000) shares of the Company’s common stock, par value $.0001 per share (the “ Common Stock ”), at a purchase price of ($0.01) per share, exercisable for a period of up to Sixty (60) months commencing on the date hereof. The right to purchase all One Million (1,000,000) shares shall vest immediately.

The Company covenants that all shares that may be issued upon the exercise of the Warrant, upon issuance, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants that during the period within which the Warrant may be exercised, the Company will at all times have authorized and reserved a sufficient number of shares of Common Stock to permit the exercise of the Warrant.

This Warrant is not transferable.

If the foregoing correctly sets forth our understanding, please sign below.

Very truly yours,	Accepted as of the
	date written above:
Vystar Corporation

William R Doyle	Joseph T Drennan, Vice President
President & Chief Operating Officer	Universal Capital Management, Inc.

EXHIBIT A

WARRANT No. ___

NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT OR THE SHARES PURCHASABLE HEREUNDER SHALL BE MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS WARRANT IS ALSO RESTRICTED BY A WARRANT PURCHASE AGREEMENT DATED February 28, 2008 A COPY OF WHICH IS AVAILABLE FROM THE ISSUER.

WARRANT TO PURCHASE COMMON STOCK

IN VYSTAR CORPORATION

Exercisable Commencing

January 31, 2008

Void After

January 31, 2013

THIS CERTIFIES that, for value received, Universal Capital Management, Inc. of 2601 Annand Dr., #16, Wilmington, Delaware 19808 , is entitled, subject to the terms and conditions set forth in this Warrant, to purchase from Vystar Corporation (“ Company "), located at 3235 Satellite Blvd., Building 400, Suite 290, Duluth, GA 30096 One Million (1,000,000) shares of the Company’s common stock, par value $.0001 per share (the “ Common Stock ”), at a purchase price of ($.01) per share, exercisable for a period of up to Sixty (60) months commencing on the date hereof, subject to adjustment as provided in Section 5 below. This Warrant is issued pursuant to a Warrant Purchase Agreement between Universal Capital Management, Inc. and the Company, dated January 31, 2008, and is subject to all the terms thereof, including the vesting schedules set forth in Section 1 thereof, and the limitations on transferability set forth in Section 3 thereof.

1. This Warrant may be exercised by the holder hereof, in whole or in part (but not as to a fractional share), by the presentation and surrender of this Warrant with the form of Election to Purchase duly executed, at the principal office of the Company (or at such other address as the Company may designate by notice in writing to the holder hereof at the address of such holder appearing on the books of the Company), and upon payment to the Company of the purchase price by certified or bank cashier's check. The shares of Common Stock so purchased shall be deemed to be issued to the holder hereof as the record owner of such shares of Common Stock as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares. Certificates for the shares of Common Stock so purchased shall be delivered or mailed to the holder promptly after this Warrant has been exercised, and if applicable, a new Warrant identical in form representing the number of shares of Common Stock with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof.

2. Nothing contained herein shall be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company.

3. The Company shall not issue certificates representing fractions of shares of Common Stock upon the exercise of this Warrant, but shall make a cash payment for any fractional share based on the market price of the Common Stock on the date of exercise, which shall be the closing sale price on the principal exchange on which the Common Stock is traded; or if not traded on any exchange, then the representative closing bid price in the over-the-counter market; or if not traded in the over-the-counter market, the fair market value as determined by the Company’s board of directors. All calculations under this Section 3 and under Section 5 shall be made to the nearest cent or shares, as the case may be.

4. Subject to the limitations on transfer set forth in Section 3 of the Warrant Purchase Agreement, this Warrant is exchangeable, upon its surrender by the holder at the office of the Company referred to in Section 1 above, for new warrants (containing the same terms as this Warrant) each representing the right to purchase such number of shares of Common Stock as shall be designated by such holder at the time of such surrender (but not exceeding in the aggregate the remaining number of shares of Common Stock which may be purchased hereunder). Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of a bond of indemnity satisfactory to the Company (or, in the case of mutilation, upon surrender of this Warrant), the Company will issue to the holder a replacement warrant (containing the same terms as this Warrant). As used herein, "Warrant" shall include all new warrants issued in exchange for or replacement of this Warrant.

5. If the Company shall pay a dividend in shares of its Common Shares, subdivide (forward-split) its outstanding shares of Common Stock, combine (reverse-split) its outstanding shares of Common Stock, issue by reclassification of its shares of Common Stock any shares or other securities of the Company, or distribute to holders of its Common Stock any securities of the Company or of another entity, the number of shares of Common Stock or other securities the holder hereof is entitled to purchase pursuant to this Warrant immediately prior thereto shall be adjusted so that the holder shall be entitled to receive upon exercise the number of shares of Common Stock or other securities which he or she would have owned or would have been entitled to receive after the happening of any of the events described above had this Warrant been exercised immediately prior to the happening of such event, and the exercise price per share shall be correspondingly adjusted; provided, however, that no adjustment in the number of shares and/or the exercise price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in such number and/or price; and provided further, however, that any adjustments which by reason of this Section 5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. An adjustment made pursuant to this Section 5 shall become effective immediately after the record date in the case of the stock dividend or other distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. The holder of this Warrant shall be entitled to participate in any subscription or other rights offering made to holders of Common Stock had he purchased the full number of shares as to which this Warrant remains unexercised immediately prior to the record date for such rights offering. If the Company is consolidated or merged with or into another corporation or if all or substantially all of its assets are conveyed to another corporation this Warrant shall thereafter be exercisable for the purchase of the kind and number of shares of stock or other securities or property, if any, receivable upon such consolidation, merger or conveyance by a holder of the number of shares of Common Stock of the Company which could have been purchased on the exercise of this Warrant immediately prior to such consolidation, merger or conveyance; and, in any such case, appropriate adjustment (as determined by the Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holder of this Warrant to the end that the provisions set forth herein (including provisions with respect to changes in and other adjustments of the number of shares of Common Stock the holder of this Warrant is entitled to purchase) shall thereafter be applicable, as nearly as possible, in relation to any shares of Common Stock or other securities or other property thereafter deliverable upon the exercise of this Warrant. Upon any adjustment of the number of shares of Common Stock or other securities the holder of this Warrant is entitled to purchase, and of any change in exercise price per share, then in each such case the Company shall give written notice thereof to the then registered holder of this Warrant at the address of such holder as shown on the books of the Company, which notice shall state such change and set forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

6. If at any time:

The Company shall declare a dividend or other distribution on its Common Stock payable otherwise than in cash at the same rate as the immediately preceding regular dividend or in Common Stock;

The Company shall authorize the granting to the holders of its Common Stock of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights;

There shall be any plan or agreement of reorganization, or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or

There shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall give to the registered holder of this Warrant at the address of such holder as shown on the books of the Company, at any time prior to the applicable record date or dates, a written notice summarizing such action or event and stating the record date or dates for any such dividend or rights (or if a record is not to be taken, the date or dates as of which the holders of Common Stock of record to be entitled to such dividend or rights are to be determined), the date on which any such reorganization, reclassification, consolidation, merger, sale of assets, dissolution, liquidation or winding up is expected to become effective, and the date or dates as of which it is expected the holders of Common Stock of record shall be entitled to effect any exchange of their shares of Common Stock for securities of other property deliverable upon any such reorganization, reclassification, consolidation, merger, sale of assets, dissolution, liquidation or winding up.

IN WITNESS WHEREOF , the Company has caused this Warrant to be signed by its duly authorized officers on January 31, 2008.

Attested:	VYSTAR CORPORATION


By:_______________________	By: __________________________
	William R Doyle , President & Chief Operating Officer

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (“Agreement”) is dated April 30, 2008 (“Effective Date”) by and between UNIVERSAL CAPITAL MANAGEMENT, INC. , a Delaware corporation (“ Manager ”), and VYSTAR CORPORATION, a Georgia corporation ( “VYSTAR” or “Company” ) .

BACKGROUND

1. Appointment as Manager .

2. Scope of Services .

(a) Manager hereby agrees to provide to VYSTAR the following services (as amended from time to time, collectively, the “Services” ):

(i)

Significant Managerial Assistance. Upon VYSTAR’s request, Manager may provide VYSTAR with day to day managerial assistance on issues such as employment, payroll, and benefits; real estate leasing; utility utilization; capital expenditures; personnel; and other related matters.

(ii)

Financial Reporting Services. Upon VYSTAR’s request, Manager may assist in providing VYSTAR on a quarter-annual basis a balance sheet, income statement and statement of cash flow for VYSTAR. Such financial reports shall be completed not later than thirty (30) days after the end of the quarter-annual period reported on. Income statements will be based on generally accepted accounting principles as in effect in the United States of America, consistently applied from period to period and in accordance with the terms of contracts and service agreements.

(iii)

Tax Reporting Services. Upon VYSTAR’s request, Manager may assist in the preparation of sales and use tax returns for all jurisdictions in which VYSTAR is then subject to reporting as determined by VYSTAR for goods or services sold. If such services are requested, Manager shall provide VYSTAR with the amount of such liability not later than the 10 ^th business day of each calendar month in which a sales/use tax liability is due to be paid VYSTAR.. Such returns shall be delivered to VYSTAR for execution no later than three (3) days prior to the filing due date for any such return.

(iv)

Accounts Payable Services.

(I.) Upon VYSTAR’s request, Manager may assist VYSTAR in providing for the usual and ordinary business aspects of the accounts payable process for VYSTAR, including but not limited to:

Maintaining vendor master

Processing vendor invoices

Executing vendor payments from VYSTAR’s funds

Processing travel expense reports

Executing employee payments for travel expense from funds

Stop payment administration

1099 Misc. reporting

Invoice filing

Documentation retention

(II.) Upon VYSTAR’s request, Manager may assist VYSTAR with its outstanding accounts payable based upon contracted payment terms and consistent with past business practice.

(b) To the extent that Manager is able in the ordinary course of business, Manager shall provide or cause to be provided, and shall be responsible for said costs associated with, all personnel, facilities, equipment, systems and management necessary or appropriate to provide such Services. In no event will Manager be required to stay in business or take other extraordinary measures solely to provide the Services to VYSTAR; provided, that Manager shall provide Services pursuant to this Agreement in the same order of priority as it provides the same or similar services to its own departments, and provided VYSTAR is notified in advance of any delay and the Services are provided to VYSTAR at the next available opportunity.

(c) During the Term of this Agreement, VYSTAR may from time to time request that Manager provide special services or projects in addition to the Services identified in this Section 2, and Manager may in its sole discretion agree to provide such additional services or projects. If Manager agrees to provide such additional services or projects, the Parties shall negotiate in good faith to establish the terms (including, without limitation, price) for providing such additional services or projects, and following agreement on such terms, this Section 2 shall be amended to include such additional services and projects.

3. Term and Termination .

4. Compensation .

Within thirty (30) days of the signing of this agreement VYSTAR shall pay Manager for the Services by delivering to Manager a Warrant attached hereto as Exhibit A, pursuant to a Warrant Purchase Agreement attached hereto as Exhibit B, to purchase up to Five Hundred Thousand (500,000) Shares of the common stock of the Company at an exercise price of $2.00. The Warrant will be exercisable in whole or in part at or before 5:00 p.m. E.S.T. on April 30, 2013.

If the term of this Agreement extends beyond the Term, VYSTAR shall pay for continuing Services hereunder by delivering to the Manager a Warrant to purchase up to five hundred thousand (500,000) additional shares, at an exercise price of $0.01, on the anniversary of the Effective Date and each anniversary date thereafter during the term of this Agreement.

7. Confidential Information; Ownership .

(b) No party shall be under any obligations with respect to any Confidential Information:

(i) which is, at the time of disclosure, available to the general public;

(ii) which becomes at a later date available to the general public through no fault on the part of such party and then only after such later date;

(iii) which such party can demonstrate was in its possession before receipt from the other party; or

(iv) which is disclosed to such party without restriction on disclosure by a third party who has the lawful right to disclose such information.

9. Force Majeure .

11. Manager’s Investment Representations . Manager hereby represents and warrants to and with VYSTAR that:

12. Definitions .

(a) “Affiliate” means, with respect to a Person, another Person who controls, is controlled by or is under common control with the first such Person.

(c) “Control” means the ability, through stock ownership, contract, or otherwise, to control the business or officers of a Person.

(f) “Person” means an individual or entity.

(g) “Shares” means shares of common stock of VYSTAR, par value $.0001 dollars per share acquired by Manager pursuant to this Agreement.

13. Miscellaneous .

If to:

Manager

Universal Capital Management, Inc.

2601 Annand Drive

Suite 16

Wilmington, DE 19808

Attention: Michael D. Queen

If to:

VYSTAR CORPORATION

3235 Satellite Blvd.

Building 400, Suite 290

Duluth, GA 30096

Attention: William R. Doyle

(d) Binding Nature of Agreement; No Assignment . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF , the Parties hereto have executed this Management Agreement

VYSTAR Corporation	Universal Capital Management, Inc.


By: _______________________________	By: ____________________________


Name: ____________________________	Name: Joseph T. Drennan


Title: ____________________________	Title: Vice President and CFO

WARRANT PURCHASE AGREEMENT

April 30, 2008

Universal Capital Management, Inc.

2 601 Annand Dr., #16

Wilmington, Delaware 19808

Vystar Corporation , a Georgia corporation (the " Company "), hereby agrees with you as follows:

Concurrently with the execution of this Warrant Purchase Agreement (the “ Agreement ”), the Company is entering into with you a consulting agreement, of even date hereof. Pursuant to the terms of the consulting agreement, the Company will deliver to you a Warrant (the " Warrant ") in the form of Exhibit A hereto, to purchase up to Five Hundred Thousand (500,000) shares of the Company’s common stock, par value $.0001 per share (the “ Common Stock ”), at a purchase price of ($2.00) per share, exercisable for a period of up to Sixty (60) months commencing on the date hereof. The right to purchase all Five Hundred Thousand (500,000) shares shall vest immediately.

This Warrant is not transferable.

If the foregoing correctly sets forth our understanding, please sign below.

Very truly yours,
	Accepted as of the
Vystar Corporation	date written above:

William R Doyle	Joseph T Drennan, Vice President
President & Chief Executive Officer	Universal Capital Management, Inc.

EXHIBIT A

WARRANT No. ___

NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT OR THE SHARES PURCHASABLE HEREUNDER SHALL BE MADE EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS WARRANT IS ALSO RESTRICTED BY A WARRANT PURCHASE AGREEMENT DATED April 30, 2008 A COPY OF WHICH IS AVAILABLE FROM THE ISSUER.

WARRANT TO PURCHASE COMMON STOCK

IN VYSTAR CORPORATION

Exercisable Commencing

April 30, 2008

Void After

April 30, 2013

THIS CERTIFIES that, for value received, Universal Capital Management, Inc. of 2601 Annand Dr., #16, Wilmington, Delaware 19808 , is entitled, subject to the terms and conditions set forth in this Warrant, to purchase from Vystar Corporation (“ Company "), located at 3235 Satellite Blvd., Building 400, Suite 290, Duluth, GA 30096 Five Hundred Thousand (500,000) shares of the Company’s common stock, par value $.0001 per share (the “ Common Stock ”), at a purchase price of ($2.00) per share, exercisable for a period of up to Sixty (60) months commencing on the date hereof, subject to adjustment as provided in Section 5 below. This Warrant is issued pursuant to a Warrant Purchase Agreement between Universal Capital Management, Inc. and the Company, dated April 30, 2008, and is subject to all the terms thereof, including the vesting schedules set forth in Section 1 thereof, and the limitations on transferability set forth in Section 3 thereof.

2. Nothing contained herein shall be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company.

6. If at any time:

The Company shall declare a dividend or other distribution on its Common Stock payable otherwise than in cash at the same rate as the immediately preceding regular dividend or in Common Stock;

The Company shall authorize the granting to the holders of its Common Stock of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights;

IN WITNESS WHEREOF , the Company has caused this Warrant to be signed by its duly authorized officers on April 30, 2008.

Attested:	VYSTAR CORPORATION



By:_______________________	By: ________________________________________
	William R Doyle , President & Chief Executive Officer

Vystar Corporation

2004 LONG-TERM INCENTIVE COMPENSATION PLAN

_________________________________

2004 LONG-TERM INCENTIVE COMPENSATION PLAN

1.	Purpose		1
2.	Definitions		1
3.	Administration		6
	(a)	Authority of the Committee	6
	(b)	Manner of Exercise of Committee Authority	7
	(c)	Limitation of Liability.	7
4.	Shares Subject to Plan		7
	(a)	Limitation on Overall Number of Shares Available for Delivery Under Plan	7
	(b)	Application of Limitation to Grants of Award	7
	(c)	Availability of Shares Not Delivered under Awards and Adjustments to Limits	8
5.	Eligibility; Per-Person Award Limitations		8
6.	Specific Terms of Awards		9
	(a)	General	9
	(b)	Options	9
	(c)	Stock Appreciation Rights	10
	(d)	Restricted Stock Awards	11
	(e)	Deferred Stock Award	12
	(f)	Bonus Stock and Awards in Lieu of Obligations	13
	(g)	Dividend Equivalents	13
	(h)	Performance Awards	14
	(i)	Other Stock-Based Awards	14
7.	Certain Provisions Applicable to Awards		14
	(a)	Stand-Alone, Additional, Tandem, and Substitute Awards	14
	(b)	Term of Awards	15
	(c)	Form and Timing of Payment Under Awards; Deferrals	15
	(d)	Exemptions from Section 16(b) Liability.	15
8.	Code Section 162(m) Provisions		16
	(a)	Covered Employees.	16
	(b)	Performance Criteria.	16
	(c)	Performance Period; Timing for Establishing Performance Goals.	16
	(d)	Adjustments.	17

9.	Change in Control		17
	(a)	Effect of Change in Control	17
	(b)	Definition of Change in Control	18
10.	General Provisions.		19
	(a)	Compliance With Legal and Other Requirements.	19
	(b)	Limits on Transferability; Beneficiaries	19
	(c)	Adjustments	20
	(d)	Taxes	21
	(e)	Changes to the Plan and Awards	21
	(f)	Limitation on Rights Conferred Under Plan	22
	(g)	Unfunded Status of Awards; Creation of Trusts	22
	(h)	Nonexclusivity of the Plan	22
	(i)	Payments in the Event of Forfeitures; Fractional Shares	22
	(j)	Governing Law	22
	(k)	Non-U.S. Laws	22
	(l)	Plan Effective Date; Termination of Plan	23

Vystar Corporation

2004 LONG-TERM INCENTIVE COMPENSATION PLAN

1. Purpose . The purpose of this 2004 LONG-TERM INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist Vystar Corporation, a Georgia corporation (the “Company”) and its Related Entities (as hereinafter defined) in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company's shareholders, and providing such persons with long term performance incentives to expend their maximum efforts in the creation of shareholder value.

2. Definitions . For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 hereof.

(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award, Share granted as a bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest, granted to a Participant under the Plan.

(b) “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder.

(c) “Beneficiary” means the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant's death or to which Awards or other rights are transferred if and to the extent permitted under Section 10(b) hereof. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

(d) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.

(e) “Board” means the Company's Board of Directors.

(f) “Cause” shall, with respect to any Participant have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, “Cause” shall have the equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment, consulting, or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform, in a reasonable manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or breach by the Participant of his or her employment, consulting or other similar agreement with the Company or a Related Entity, if any, (iii) any violation or breach by the Participant of any non-competition, non-solicitation, non-disclosure and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of dishonesty or bad faith with respect to the Company or a Related Entity, (v) use of alcohol, drugs or other similar substances in a manner that adversely affects the Participant’s work performance, or (vi) the commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Company or any Related Entity. The good faith determination by the Committee of whether the Participant’s Continuous Service was terminated by the Company for “Cause” shall be final and binding for all purposes hereunder.

(g) “Change in Control” means a Change in Control as defined with related terms in Section 9(b) of the Plan.

(h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

(i) “Committee” means a committee designated by the Board to administer the Plan; provided, however, that if the Board fails to designate a committee or if there are no longer any members on the committee so designated by the Board, then the Board shall serve as the Committee. In the event that the Company becomes a Publicly Held Corporation (as hereinafter defined), then the Committee shall consist of at least two directors, and each member of the Committee shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) “Independent”.

(j) “Consultant” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

(k) “Continuous Service” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee, Director, Consultant or other service provider. Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity of Employee, Director, Consultant or other service provider, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director, Consultant or other service provider (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.

(l) “Deferred Stock” means a right to receive Shares, including Restricted Stock, cash or a combination thereof, at the end of a specified deferral period.

(m) “Deferred Stock Award” means an Award of Deferred Stock granted to a Participant under Section 6(e) hereof.

(n) “Director” means a member of the Board or the board of directors of any Related Entity.

(o) “Disability” means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory to the Committee.

(p) “Discounted Option” means any Option awarded under Section 6(b) hereof with an exercise price that is less than the Fair Market Value of a Share on the date of grant.

(q) “Discounted Stock Appreciation Right” means any Stock Appreciation Right awarded under Section 6(c) hereof with an exercise price that is less than the Fair Market Value of a Share on the date of grant.

(r) “Dividend Equivalent” means a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.

(s) “Effective Date” means the effective date of the Plan, which shall be November 30, 2004.

(t) “Eligible Person” means each officer, Director, Employee, Consultant and other person who provides services to the Company or any Related Entity. The foregoing notwithstanding, only employees of the Company, or any parent corporation or subsidiary corporation of the Company (as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible Persons for purposes of receiving any Incentive Stock Options. An Employee on leave of absence may be considered as still in the employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan.

(u) “Employee” means any person, including an officer or Director, who is an employee of the Company or any Related Entity. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

(v) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

(w) “Fair Market Value” means the fair market value of Shares, Awards or other property as determined by the Committee, or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of a Share as of any given date after which the Company is a Publicly Held Corporation shall be the closing sale price per Share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date immediately preceding the date as of which such value is being determined or, if there is no sale on that date, then on the last previous day on which a sale was reported.

(x) “Good Reason” shall, with respect to any Participant, have the meaning specified in the Award Agreement. In the absence of any definition in the Award Agreement, “Good Reason” shall have the equivalent meaning or the same meaning as “good reason” or “for good reason” set forth in any employment, consulting or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect with the Participant's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as assigned by the Company or a Related Entity, or any other action by the Company or a Related Entity which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related Entity to comply with its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; or (iii) the Company's or Related Entity’s requiring the Participant to be based at any office or location outside of [fifty] miles from the location of employment or service as of the date of Award, except for travel reasonably required in the performance of the Participant’s responsibilities.

(y) “Incentive Stock Option” means any Option intended to be designated as an incentive stock option within the meaning of Section 422 of the Code or any successor provision thereto.

(z) “Independent”, when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of any national securities exchange on which any securities of the Company are listed for trading, and if not listed for trading, by the rules of Nasdaq Stock Market.

(aa) “Incumbent Board” means the Incumbent Board as defined in Section 9(b)(ii) of the Plan.

(bb) “Option” means a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during specified time periods.

(cc) “Optionee” means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan.

(dd) “Option Proceeds” means the cash actually received by the Company for the exercise price in connection with the exercise of Options that are exercised after the Effective Date of the Plan, plus the maximum tax benefit that could be realized by the Company as a result of the exercise of such Options, which tax benefit shall be determined by multiplying (i) the amount that is deductible for Federal income tax purposes as a result of any such option exercise (currently, equal to the amount upon which the Participant's withholding tax obligation is calculated), times (ii) the maximum Federal corporate income tax rate for the year of exercise. With respect to Options to the extent that a Participant pays the exercise price and/or withholding taxes with Shares, Option Proceeds shall not be calculated with respect to the amounts so paid in Shares.

(ee) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(i) hereof.

(ff) “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.

(gg) “Performance Award” shall mean any Award of Performance Shares or Performance Units granted pursuant to Section 6(h).

(hh) “Performance Period” means that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

(ii) “Performance Share” means any grant pursuant to Section 6(h) of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

(jj) “Performance Unit” means any grant pursuant to Section 6(h) of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

(kk) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section 13(d) thereof.

(ll) “Publicly Held Corporation” shall mean a publicly held corporation as that term is used under Section 162(m)(2) of the Code.

(mm) “Related Entity” means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by Board in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly.

(nn) “Restricted Stock” means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such risks of forfeiture and other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

(oo) “Restricted Stock Award” means an Award granted to a Participant under Section 6(d) hereof.

(pp) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.

(qq) “Shares” means the shares of common stock of the Company, have no par value, and such other securities as may be substituted (or resubstituted) for Shares pursuant to Section 10(c) hereof.

(rr) “Stock Appreciation Right” means a right granted to a Participant under Section 6(c) hereof.

(ss) “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of the assets on liquidation or dissolution.

(tt) “Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines.

3. Administration .

( a ) Authority of the Committee . The Plan shall be administered by the Committee; provided, however, that except as otherwise expressly provided in this Plan, the Board may exercise any power or authority granted to the Committee under this Plan and in that case, references herein shall be deemed to include references to the Board. The Committee shall have full and final authority, subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past practices, act in a manner consistent with past practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of other Eligible Persons or Participants.

(b) Manner of Exercise of Committee Authority . In the event that the Company becomes a Publicly Held Corporation, the Committee, and not the Board, shall exercise sole and exclusive discretion on any matter relating to a Participant then subject to Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its Related Entities, Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a Participant, and shareholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms as the Committee shall determine to perform such functions, including administrative functions as the Committee may determine to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify. The Committee may appoint agents to assist it in administering the Plan.

(c) Limitation of Liability . The Committee and the Board, and each member thereof, shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or Employee, the Company's independent auditors, Consultants or any other agents assisting in the administration of the Plan. Members of the Committee and the Board, and any officer or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

4. Shares Subject to Plan .

(a) Limitation on Overall Number of Shares Available for Delivery Under Plan . Subject to adjustment as provided in Section 10(c) hereof, the total number of Shares reserved and available for grant under the Plan shall be 4,000,000. Any Shares that are subject to Awards of Options or Stock Appreciation Rights shall be counted against this limit as one (1) Share for every one (1) Share granted. Any Shares that are subject to Awards other than Options or Stock Appreciation Rights shall be counted against this limit as one and one-half (1.5) Shares for every one (1) Share granted. Any Shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.

(b) Application of Limitation to Grants of Award. . No Award may be granted if the number of Shares to be delivered in connection with such an Award or, in the case of an Award relating to Shares but settled only in cash (such as cash-only Stock Appreciation Rights), the number of Shares to which such Award relates, exceeds the number of Shares remaining available under the Plan, minus the number of Shares deliverable in settlement of or relating to then outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with an Award.

(i) If any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for Awards under the Plan, subject to Section 4(c)(v) below.

(ii) In the event that any Option or other Award granted hereunder is exercised through the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, or withholding tax liabilities arising from such Option or other Award are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, then only the number of Shares issued net of the Shares tendered or withheld shall be counted for purposes of determining the maximum number of Shares available for grant under the Plan.

(iii) Shares reacquired by the Company on the open market using Option Proceeds shall be available for Awards under the Plan. The increase in Shares available pursuant to the repurchase of Shares with Option Proceeds shall not be greater than the amount of such proceeds divided by the Fair Market Value of a Share on the date of exercise of the Option giving rise to such Option Proceeds.

(iv) Substitute Awards shall not reduce the Shares authorized for grant under the Plan or authorized for grant to a Participant in any period. Additionally, in the event that a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for delivery pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for delivery under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination.

(v) Any Shares that again become available for delivery pursuant to this Section 4(c) shall be added back as one (1).

(vi) Notwithstanding anything in this Section 4(c) to the contrary and solely for purposes of determining whether Shares are available for the delivery of Incentive Stock Options, the maximum aggregate number of shares that may be granted under this Plan shall be determined without regard to any Shares restored pursuant to this Section 4(c) that, if taken into account, would cause the Plan to fail the requirement under Code Section 422 that the Plan designate a maximum aggregate number of shares that may be issued.

5. Eligibility.. Awards may be granted under the Plan only to Eligible Persons.

6. Specific Terms of Awards .

(a) General . Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of the Participant’s Continuous Service and terms permitting a Participant to make elections relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of Georgia law, no consideration other than services may be required for the grant (but not the exercise) of any Award.

(b) Options. The Committee is authorized to grant Options to any Eligible Person on the following terms and conditions:

(i) Exercise Price. Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall be determined by the Committee, provided that such exercise price shall not, in the case of Incentive Stock Options, be less than 100% of the Fair Market Value of a Share on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option. If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such employee, the exercise price of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value a Share on the date such Incentive Stock Option is granted Other than pursuant to Section 10(c), the Committee shall not be permitted to (A) lower the exercise price per Share of an Option after it is granted, (B) cancel an Option when the exercise price per Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award (other than in connection with Substitute Awards), or (C) take any other action with respect to an Option that may be treated as a repricing, without approval of the Company's shareholders.

(ii) Time and Method of Exercise . The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Options shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Shares, other Awards or awards granted under other plans of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis provided that such deferred payments are not in violation of the Sarbanes-Oxley Act of 2002, or any rule or regulation adopted thereunder or any other applicable law), and the methods by or forms in which Shares will be delivered or deemed to be delivered to Participants. Except under certain circumstances contemplated by Section 9 or as may be set forth in an Award Agreement with respect to the death or Disability of a Participant, Options shall not be exercisable before the expiration of one year from the date the Option is granted.

(iii) Incentive Stock Options . The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock Appreciation Right issued in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of the Code, unless the Participant has first requested, or consents to, the change that will result in such disqualification. Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the following special terms and conditions:

(A) the Option shall not be exercisable more than ten years after the date such Incentive Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant; and

(B) The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) during any calendar year exercisable for the first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed $100,000.

(c) Stock Appreciation Rights . The Committee may grant Stock Appreciation Rights to any Eligible Person in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation Right”), or without regard to any Option (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including the following:

(i) Right to Payment . A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee. The grant price of a Stock Appreciation Right shall not be less than 75% of the Fair Market Value of a Share on the date of grant, in the case of a Freestanding Stock Appreciation Right, or less than the associated Option exercise price, in the case of a Tandem Stock Appreciation Right. Other than pursuant to Section 10(c), the Committee shall not be permitted to (A) lower the exercise price per Share of a Stock Appreciation Right after it is granted, (B) cancel a Stock Appreciation Right when the exercise price per Share exceeds the Fair Market Value of the underlying Shares in exchange for another Award (other than in connection with Substitute Awards), or (C) take any other action with respect to a Stock Appreciation Right that may be treated as a repricing, without shareholder approval. A Freestanding Stock Appreciation Right shall not be exercisable before the expiration of one year from the date of grant, except under certain circumstances contemplated by Section 9 or as may be set forth in an Award Agreement with respect to the death or Disability of a Participant.

(ii) Other Terms . The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.

(iii) Tandem Stock Appreciation Rights. Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or, for Options that are not Incentive Stock Options, at any time thereafter before exercise or expiration of such Option. Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares can be acquired pursuant to the Option. In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised.

(d) Restricted Stock Awards . The Committee is authorized to grant Restricted Stock Awards to any Eligible Person on the following terms and conditions:

(i) Grant and Restrictions . Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan, covering a period of time specified by the Committee (the “Restriction Period”). The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan. The restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the Restriction Period, subject to Section 10(b) below, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

(ii) Forfeiture . Except as otherwise determined by the Committee, upon termination of a Participant's Continuous Service during the applicable Restriction Period, the Participant's Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to Restricted Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes.

(iii) Certificates for Stock . Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

(iv) Dividends and Splits . As a condition to the grant of a Restricted Stock Award, the Committee may require or permit a Participant to elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to the purchase of additional Awards under the Plan. Unless otherwise determined by the Committee, Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been distributed.

(v) Minimum Vesting Period. Except for certain limited situations (including termination of employment, a Change in Control referred to in Section 9, grants to new hires to replace forfeited compensation, grants representing payment of earned Performance Awards or other incentive compensation, or grants to Directors), Restricted Stock Awards subject solely to future service requirements shall have a Restriction Period of not less than three years from date of grant (but permitting pro-rata vesting over such time).

(e) Deferred Stock Award . The Committee is authorized to grant Deferred Stock Awards to any Eligible Person on the following terms and conditions:

(i) Award and Restrictions . Satisfaction of a Deferred Stock Award shall occur upon expiration of the deferral period specified for such Deferred Stock Award by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, a Deferred Stock Award shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. A Deferred Stock Award may be satisfied by delivery of Shares, cash equal to the Fair Market Value of the specified number of Shares covered by the Deferred Stock, or a combination thereof, as determined by the Committee at the date of grant or thereafter. Prior to satisfaction of a Deferred Stock Award, a Deferred Stock Award carries no voting or dividend or other rights associated with Share ownership.

(ii) Forfeiture . Except as otherwise determined by the Committee, upon termination of a Participant's Continuous Service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Deferred Stock Award), the Participant's Deferred Stock Award that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to a Deferred Stock Award shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of any Deferred Stock Award.

(iii) Dividend Equivalents . Unless otherwise determined by the Committee at date of grant, any Dividend Equivalents that are granted with respect to any Deferred Stock Award shall be either (A) paid with respect to such Deferred Stock Award at the dividend payment date in cash or in Shares of unrestricted stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock Award and the amount or value thereof automatically deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect.

(f) Bonus Stock and Awards in Lieu of Obligations . The Committee is authorized to grant Shares to any Eligible Persons as a bonus, or to grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, provided that, in the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from liability under Section 16(b) of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee.

(g) Dividend Equivalents . The Committee is authorized to grant Dividend Equivalents in connection with another Award granted to any Eligible Person entitling the Eligible Person to receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of Shares, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify.

(h) Performance Awards . The Committee is authorized to grant Performance Awards to any Eligible Person payable in cash, Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 if and to the extent that the Committee shall, in its sole discretion, determine that an Award shall be subject to those provisions. The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award ; provided, however, that a Performance Period shall not be shorter than 12 m onths nor longer than five year s. Except as provided in Section 9 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 8(b), or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria that the Committee, in its sole discretion, shall determine should be used for that purpose. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis.

(i) Other Stock-Based Awards . The Committee is authorized, subject to limitations under applicable law, to grant to any Eligible Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan. Other Stock-Based Awards may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. The Committee shall determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(i) shall be purchased for such consideration, (including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of the Sarbanes Oxley Act of 2002, or any rule or regulation adopted thereunder or any other applicable law) paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall determine. Except for certain limited situations (including termination of employment, a Change in Control referred to in Section 9, grants to new hires to replace forfeited compensation, grants representing payment of earned Performance Awards or other incentive compensation, or grants to Directors), Other Stock-Based Awards subject solely to future service requirements shall be subject to restrictions for a period of not less than three years from date of grant (but permitting pro-rata vesting over such time).

7. Certain Provisions Applicable to Awards .

(a) Stand-Alone, Additional, Tandem, and Substitute Awards . Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity, or any other right of a Participant to receive payment from the Company or any Related Entity. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Related Entity, in which the value of Stock subject to the Award is equivalent in value to the cash compensation (for example, Deferred Stock or Restricted Stock), or in which the exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Stock minus the value of the cash compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price “discounted” by the amount of the cash compensation surrendered).

(b) Term of Awards . The term of each Award shall be for such period as may be determined by the Committee; provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option such shorter term as may be required under Section 422 of the Code).

(c) Form and Timing of Payment Under Awards; Deferrals . Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Shares, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. Any installment or deferral provided for in the preceding sentence shall, however, be subject to the Company’s compliance with the provisions of the Sarbanes-Oxley Act of 2002, the rules and regulations adopted by the Securities and Exchange Commission thereunder, and all applicable rules of the Nasdaq Stock Market or any national securities exchange on which the Company’s securities are listed for trading and, if not listed for trading on either the Nasdaq Stock Market or a national securities exchange, then the rules of the Nasdaq Stock Market. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control). Installment or deferred payments may be required by the Committee (subject to Section 10(e) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Shares.

(d) Exemptions from Section 16(b) Liability . If the Company becomes a Publicly Held Corporation, it is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b).

8. Code Section 162(m) Provisions .

(a ) Covered Employees. If the Company becomes a Publicly Held Corporation, the Committee, in its discretion, may determine at the time an Award is granted to an Eligible Person who is, or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, that the provisions of this Section 8 shall be applicable to such Award.

(b ) Performance Criteria . If an Award is subject to this Section 8, then the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be contingent upon achievement of one or more objective performance goals. Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” One or more of the following business criteria for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical units of the Company and/or a Related Entity (except with respect to the total shareholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for such Awards: (1) earnings per share; (2) revenues or margins; (3) cash flow; (4) operating margin; (5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings after interest expense and before extraordinary or special items; operating income; income before interest income or expense, unusual items and income taxes, local, state or federal and excluding budgeted and actual bonuses which might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of fixed costs or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including strategic mergers, acquisitions or divestitures; (12) total shareholder return; and (13) debt reduction. Any of the above goals may be determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of companies that are comparable to the Company. The Committee may exclude the impact of an event or occurrence which the Committee determines should appropriately be excluded, including without limitation (i) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (iii) a change in accounting standards required by generally accepted accounting principles.

(c ) Performance Period; Timing For Establishing Performance Goals . Achievement of performance goals in respect of such Performance Awards shall be measured over a Performance Period no shorter than 12 months and no longer than five years, as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any Performance Period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Code Section 162(m).

(d ) Adjustments . The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with Awards subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of an Award subject to this Section 8. The Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Awards.

9 . Change in Control .

(a ) Effect of “Change in Control.” Subject to Section 9(a)(iv), and if and only to the extent provided in the Award Agreement, or to the extent otherwise determined by the Committee, upon the occurrence of a “Change in Control,” as defined in Section 9(b):

(i ) Any Option or Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, subject to applicable restrictions set forth in Section 10(a) hereof.

(ii ) Any restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable restrictions set forth in Section 10(a) hereof.

(iii ) With respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its discretion, deem such performance goals and conditions as having been met as of the date of the Change in Control.

(iv ) Notwithstanding the foregoing, if in the event of a Change in Control the successor company assumes or substitutes for an Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award, then each outstanding Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award shall not be accelerated as described in Sections 9(a)(i), (ii) and (iii). For the purposes of this Section 9(a)(iv), an Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award shall be considered assumed or substituted for if following the Change in Control the award confers the right to purchase or receive, for each Share subject to the Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award immediately prior to the Change in Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change in Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change in Control is not solely common stock of the successor company or its parent or subsidiary, the Committee may, with the consent of the successor company or its parent or subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award or Other Stock-Based Award, for each Share subject thereto, will be solely common stock of the successor company or its parent of subsidiary substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change in Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, on such terms and conditions as may be set forth in an Award Agreement, in the event of a termination of a Participant’s employment in such successor company (other than for Cause) within 24 months following such Change in Control, each Award held by such Participant at the time of the Change in Control shall be accelerated as described in Sections 9(a)(i), (ii) and (iii) above.

(b) Definition of “Change in Control” . Unless otherwise specified in an Award Agreement, a “Change in Control” shall mean the occurrence of any of the following:

(i) The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities) (the foregoing Beneficial Ownership hereinafter being referred to as a "Controlling Interest"); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change of Control: (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; or (z) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or

(ii) During any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its Subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (each a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

10. General Provisions.

(a) Compliance With Legal and Other Requirements . The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration or qualification of such Shares or other required action under any federal or state law, rule or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Shares or other Company securities are listed or quoted, or compliance with any other obligation of the Company, as the Committee, may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Shares or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.

(b) Limits on Transferability; Beneficiaries . No Award or other right or interest granted under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) may be transferred to one or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms and conditions which the Committee may impose thereon). A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

(i) Adjustments to Awards. In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or such other securities of the Company or any other issuer such that a substitution, exchange, or adjustment is determined by the Committee to be appropriate, then the Committee shall, in such manner as it may deem equitable, substitute, exchange or adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B) the number and kind of Shares by which annual per-person Award limitations are measured under Section 5 hereof, (C) the number and kind of Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or make provision for payment of cash or other property in respect of any outstanding Award, and (E) any other aspect of any Award that the Committee determines to be appropriate.

(ii) Adjustments in Case of Certain Corporate Transactions. In the event of any merger, consolidation or other reorganization in which the Company does not survive, or in the event of any Change in Control, any outstanding Awards may be dealt with in accordance with any of the following approaches, as determined by the agreement effectuating the transaction or, if and to the extent not so determined, as determined by the Committee: (a) the continuation of the outstanding Awards by the Company, if the Company is a surviving corporation, (b) the assumption or substitution for, as those terms are defined in Section 9(b)(iv) hereof, the outstanding Awards by the surviving corporation or its parent or subsidiary, (c) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (d) settlement of the value of the outstanding Awards in cash or cash equivalents or other property followed by cancellation of such Awards (which value, in the case of Options or Stock Appreciation Rights, may in the discretion of the Committee be measured by the amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the effective date of the transaction). The Committee shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after the approval of such transaction), in order that Participants may have a reasonable period of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable (including any Awards that may become exercisable upon the closing date of such transaction). A Participant may condition his exercise of any Awards upon the consummation of the transaction.

(iii) Other Adjustments. The Committee (and the Board if and only to the extent such authority is not required to be exercised by the Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards, or performance goals relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee's assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant.

(d) Taxes . The Company and any Related Entity are authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of a Participant's tax obligations, either on a mandatory or elective basis in the discretion of the Committee.

(e) Changes to the Plan and Awards . The Board may amend, alter, suspend, discontinue or terminate the Plan, or the Committee's authority to grant Awards under the Plan, without the consent of shareholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of the Company's shareholders not later than the annual meeting next following such Board action if such shareholder approval is required by any federal or state law or regulation (including, without limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that, without the consent of an affected Participant, no such Committee or the Board action may materially and adversely affect the rights of such Participant under such Award. Notwithstanding anything to the contrary, the Committee shall be authorized to amend any outstanding Option and/or Stock Appreciation Right to reduce the exercise price or grant price without the prior approval of the shareholders of the Company. In addition, the Committee shall be authorized to cancel outstanding Options and/or Stock Appreciate Rights replaced with Awards having a lower exercise price without the prior approval of the shareholders of the Company.

(f) Limitation on Rights Conferred Under Plan . Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person's or Participant's Continuous Service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company unless and until the Participant is duly issued or transferred Shares in accordance with the terms of an Award.

(g) Unfunded Status of Awards; Creation of Trusts . The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet the Company's obligations under the Plan. Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law.

(h) Nonexclusivity of the Plan . Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable including incentive arrangements and awards which do not qualify under Section 162(m) of the Code.

(i) Payments in the Event of Forfeitures; Fractional Shares . Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

(j) Governing Law . The validity, construction and effect of the Plan, any rules and regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Georgia without giving effect to principles of conflict of laws, and applicable federal law.

(k ) Non-U.S. Laws . The Committee shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan.

(l) Plan Effective Date; Termination of Plan . The Plan shall become effective on the Effective Date. The Plan shall terminate at the earliest of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall remain in effect until they have been exercised or terminated, or have expired.

FORM OF

VYSTAR CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR

Agreement

1. Grant of Option . Vystar Corporation (the “Company”) hereby grants, as of ______________, 200___ (“Date of Grant”), to _____________________________________ (the “Optionee”) an option (the “Option”) to purchase up to ___________________ shares of the Company’s Common Stock, having no par value per share (the “Shares”), at an exercise price per share equal to $__________ (the “Exercise Price”). The Option shall be subject to the terms and conditions set forth herein. The Option was issued pursuant to the Company’s 2004 Long Term Incentive Compensation Plan (the “Plan”), which is incorporated herein for all purposes. The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option. The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations.

2. Definitions . Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributed thereto in the Plan.

3. Exercise Schedule . Except as otherwise provided in Sections 6 or 10 of this Agreement, or in the Plan, the Option is exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become exercisable with respect to a percentage of Shares as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. The following table indicates each date (the “Vesting Date”) upon which the Optionee shall be entitled to exercise the Option with respect to the percentage of Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee continues through and on the applicable Vesting Date:

Percentage of Shares

Vesting Date

Except as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Upon the termination of the Optionee’s Continuous Service with the Company and its Related Entities, any unvested portion of the Option shall terminate and be null and void.

4. Method of Exercise . The vested portion of this Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Exercise Price and (b) arrangements that are satisfactory to the Committee in its sole discretion have been made for Optionee’s payment to the Company of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding requirements. No Shares will be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements of any stock exchange upon which the Shares then may be traded.

5. Method of Payment . Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) with Shares that have been held by the Optionee for at least 6 months (or such other Shares as the Company determines will not cause the Company to recognize for financial accounting purposes a charge for compensation expense), or (d) such other consideration or in such other manner as may be determined by the Committee in its absolute discretion.

6. Termination of Option .

(a) Any unexercised portion of the Option shall automatically and without notice terminate and become null and void at the time of the earliest to occur of the following:

(i) unless the Committee otherwise determines in writing in its sole discretion, three months after the date on which the Optionee’s Continuous Service with the Company and its Related Entities is terminated for any reason other than by reason of (A) by the Company or a Related Entity for Cause, (B) a Disability of the Optionee as determined by a medical doctor satisfactory to the Committee, or (C) the Optionee's death;

(ii) immediately upon the termination of the Optionee’s Continuous Service with the Company and its Related Entities for Cause;

(iii) twelve months after the date on which the Optionee’s Continuous Service with the Company and its Related Entities is terminated by reason of a Disability as determined by a medical doctor satisfactory to the Committee;

(iv) twelve months after the date of termination of the Optionee’s Continuous Service with the Company and its Related Entities by reason of the death of the Optionee (or, if later, three months after the date on which the Optionee shall die if such death shall occur during the one year period specified in paragraph (iii) of this Section 6);

(v) the tenth anniversary of the date as of which the Option is granted; or

(vi) immediately in the event that the Optionee shall file any lawsuit or arbitration claim against the Company or any Subsidiary, or any of their respective officers, directors or shareholders.

(b) To the extent not previously exercised, (i) the Option shall terminate immediately in the event of (1) the liquidation or dissolution of the Company, or (2) any reorganization, merger, consolidation or other form of corporate transaction in which the Company does not survive or the Shares are converted into or exchanged for securities issued by another entity, or an affiliate of such successor or acquiring entity, unless the successor or acquiring entity, or an affiliate of such successor or acquiring entity, assumes the Option or substitutes an equivalent option or right pursuant to Section 10(c) of the Plan, and (ii) the Committee in its sole discretion may by written notice (“cancellation notice”) cancel, effective upon the consummation of any corporate transaction described in Subsection 9(b)(i) ] of the Plan in which the Company does survive, the Option (or portion thereof) that remains unexercised on such date. The Committee shall give written notice of any proposed transaction referred to in this Section 6(b) a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after approval of such transaction), in order that the Optionee may have a reasonable period of time prior to the closing date of such transaction within which to exercise the Option if and to the extent that it then is exercisable (including any portion of the Option that may become exercisable upon the closing date of such transaction). The Optionee may condition his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).

(c) The Company in its sole discretion may at any time during the Restricted Period, as defined in Section 7(a) hereof, by giving written notice to the Optionee, cancel the Option and instead pay to the Optionee, or his estate if the Optionee is deceased, an amount equal to the excess, if any, of (i) the fair market value, determined by the Committee as of any date determined by the Committee that is not more than one year prior to the date of the cancellation, of the Shares with respect to which the Option otherwise would have been exercisable, over (ii) the Exercise Price for such shares. Any determination of fair market value made by the Committee shall be binding and conclusive on all parties unless shown to have been made in an arbitrary and capricious manner. The purchase price shall, at the option of the Company, be payable in cash or in the form of the Company’s promissory note payable in up to three equal annual installments commencing 12 months after the acquisition by the Company (the “Acquisition Date’) of the Shares, together with interest on the unpaid balance thereof at the rate equal to the prime rate of interest as quoted in the Wall Street Journal for the Acquisition Date.

7. Restrictions While Stock is Not Registered.

(a) Restricted Shares . Any shares of Stock acquired upon exercise of the Option specified in Section 1 and (i) all shares of the Company’s capital stock received as a dividend or other distribution upon such shares, and (ii) all shares of capital stock or other securities of the Company into which such shares may be changed or for which such shares shall be exchanged, whether through reorganization, recapitalization, stock split-ups or the like, shall be subject to the provisions of this Section 7 at all times, and only at those times, that shares of the Company’s Common Stock are not registered under the Securities Exchange Act of 1934, as amended (such times during which the Stock is not so registered sometimes hereinafter being referred to as the “Restricted Period”) and are during the Restricted Period hereinafter referred to as “Restricted Shares.”

(b) No Sale or Pledge of Restricted Shares . Except as otherwise provided herein, the Optionee agrees and covenants that during the Restricted Period he or she will not sell, pledge, encumber or otherwise transfer or dispose of, and will not permit to be sold, encumbered, attached or otherwise disposed of or transferred in any manner, either voluntarily or by operation of law (all hereinafter collectively referred to as “transfers”), all or any portion of the Restricted Shares or any interest therein except in accordance with and subject to the terms of this Section 7.

(c) Voluntary Transfer Repurchase Option . If the Optionee desires to effect a voluntary transfer of any of the Restricted Shares during the Restricted Period, the Optionee shall first give written notice to the Company of such intent to transfer (the “Offer Notice”) specifying (i) the number of the Restricted Shares (the “Offered Shares”) and the date of the proposed transfer (which shall not be less than fifty (50) days after the giving of the Offer Notice), (ii) the name, address, and principal business of the proposed transferee (the “Transferee”), and (iii) the price and other terms and conditions of the proposed transfer of the Offered Shares to the Transferee. The Offer Notice by the Optionee shall constitute an offer to sell all, but not less than all, of the Offered Shares, at the price and on the terms specified in such Offer Notice, to the Company and/or its designated purchaser. If the Company desires to accept the Optionee’s offer to sell, either for itself or on behalf of its designated purchaser, the Company shall signify such acceptance by written notice to Optionee within fifty (50) days following the giving of the Option Notice. Failing such acceptance, the Optionee’s offer shall lapse on the fifty-first day following the giving of the Option Notice. With such written acceptance, the Company shall designate a day not later than ten days following the date of giving its notice of acceptance on which the Company or its designated purchaser shall deliver the purchase price of the Offered Shares (in the same form as provided in the Offer Notice) and the Optionee shall deliver to the Company or its designated Purchaser, as applicable, all certificates evidencing the Offered Shares endorsed in blank for transfer or with separate stock powers endorsed in blank for transfer. The Company may in its sole and absolute discretion, notify the Optionee within fifty-one days following the giving of the Option Notice that it does not permit the transfer of the Offered Shares to the Transferee pursuant to the terms and conditions set forth in the Option Notice in which event any such transfer or attempted transfer by the Optionee to the Transferee shall be null and void. Upon the lapse without acceptance by the Company of the Optionee’s offer to sell the Offered Shares, and unless the Company shall provide written notice to the Optionee within fifty-one days following the giving of the Option Notice that it will not permit the transfer of the Offered Shares to the Transferee pursuant to the terms and conditions set forth in the Option Notice, the Optionee shall be free to transfer the Offered Shares not purchased by the Company or the designated purchaser to the Transferee (and no one else), for a price and on terms and conditions which are no more favorable to the Transferee than those set forth in the Offer Notice, for a period of thirty days thereafter, but after such period the restrictions of this Section 7 shall again apply to the Restricted Shares. The Offered Shares so transferred by the Optionee to the Transferee shall continue to be subject to all of the terms and conditions of this Section 7 (including without limitation paragraph (f) of this Section 7) and the Company shall have the right to require, as a condition of such transfer, that the Transferee execute an agreement substantially in the form and content of the provisions of this Section 7, as well as any voting agreement and/or shareholders agreement required by the Company.

(d) Involuntary Transfer Repurchase Option . Whenever, during the Restricted Period, the Optionee has any notice or knowledge of any attempted, pending, or consummated involuntary transfer or lien or charge upon any of the Restricted Shares, whether by operation of law or otherwise, the Optionee shall give immediate written notice thereof to the Company. Whenever the Company has any other notice or knowledge of any such attempted, impending, or consummated involuntary transfer, lien, or charge, it shall give written notice thereof to the Optionee. In either case, the Optionee agrees to disclose forthwith to the Company all pertinent information in his possession relating thereto. If during the Restricted Period any of the Restricted Shares are subjected to any such involuntary transfer, lien, or charge, the Company and its designated purchaser shall at all times have the immediate and continuing option to purchase such of the Restricted Shares upon notice by the Company to the Optionee or other record holder at a price and on terms determined according to Section 7(g) below, and any of the Restricted Shares so purchased by the Company or its designated purchaser shall in every case be free and clear of such transfer, lien, or charge.

(e) Excepted Transfers . The provisions of Sections 7(b) and (c) shall not apply to transfers by the Optionee to his or her spouse, lineal descendants or trustee of trusts for their benefit, provided, however, that during the Restricted Period the Optionee shall continue to be subject to all of the terms and provisions of this Section 7 with respect to any remaining present or future interest whatsoever he or she may have in the transferred Restricted Shares, and, further provided that during the Restricted Period any shares transferred pursuant to this subsection (e) shall continue to be treated as Restricted Shares and the transferee of any such Restricted Shares shall likewise be subject to all such terms and conditions of this Section 7 as though such transferee were a party hereto.

(f) Repurchase Option After Termination of Continuous Service . Anything set forth in this Agreement to the contrary notwithstanding, the Company shall have the right (but not the obligation) to purchase or designate a purchaser of all, but not less than all, of the Restricted Shares (including, without limitation, any Restricted Shares transferred pursuant to Section 7(e)) during the Restricted Period and after termination of the Optionee’s Continuous Service for any reason, for the purchase price and on terms specified in Section 7(g) hereof. The Company may exercise its right to purchase or designate a purchaser of the Restricted Shares at any time (without any time limitation) after the Optionee’s termination of Continuous Service and during the Restricted Period. If the Company chooses to exercise its right to purchase the Restricted Shares hereunder, the Company shall give its notice of its exercise of this right to the Optionee or his or her legal representative specifying in such notice a date not later than ten (10) days following the date of giving such notice on which the Company or its designated purchaser shall deliver, or be prepared to deliver, the check or promissory note for the purchase price and the Optionee or his or her legal representative shall deliver all stock certificates evidencing such Restricted Shares duly endorsed in blank for transfer or with separate stock powers endorsed in blank for transfer.

(g) Repurchase Price . For purposes of Sections 7(d) and (f) hereof, the per share purchase price of Restricted Shares shall be an amount equal to the fair market value of such share, determined by the Committee as of any date determined by the Committee that is not more than one year prior to the date of the event giving rise to the Company’s right to purchase such Restricted Shares. [Notwithstanding the foregoing, if the event that gives rise to the Company’s right to repurchase the Restricted Shares is the termination of Optionee’s Continuous Service by the Company or a Related Entity for Cause, the per share purchase price of the Restricted Shares shall be an amount equal to the lesser of (1) the fair market value of such share (as determined in accordance with the previous sentence), and (2) the original purchase price per share the Optionee paid for such Restricted Shares.] Any determination of fair market value made by the Committee shall be binding and conclusive on all parties unless shown to have been made in an arbitrary and capricious manner. The purchase price shall, at the option of the Company, be payable in cash or in the form of the Company’s promissory note payable in up to three equal annual installments commencing 12 months after the acquisition by the Company (the “Restricted Share Acquisition Date”) of the Restricted Shares, together with interest on the unpaid balance thereof at the rate equal to the prime rate of interest as quoted in the [Wall Street Journal] on the Restricted Share Acquisition Date.

[(h) Voting Rights . As a condition to the Optionee’s exercise of any Option pursuant to this Agreement, the Company may in its discretion require that the Optionee enter into a voting agreement that grants the Company the voting rights for all shares of Stock acquired pursuant to the exercise of such Options, until the earlier of (i) 10 years from the date of exercise of the Option, or (ii) the end of the Restricted Period, such voting agreement to be in such form as the Company reasonably may request.]

(i) Legends . The certificate or certificates representing any Restricted Shares acquired pursuant to the exercise of this Option prior to the last day of the Restricted Period shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL AND REPURCHASE OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN A NONQUALIFIED STOCK OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND REPURCHASE RIGHTS ARE BINDING ON TRANSFEREES OF THESE SHARES. ]

8. Transferability . Unless otherwise determined by the Committee, the Option granted hereby is not transferable otherwise than by will or under the applicable laws of descent and distribution, and during the lifetime of the Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s guardian or legal representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated in any way (whether by operation of law or otherwise), and the Option shall not be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution, attachment or similar process contrary to the provisions hereof, the Option shall immediately become null and void. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and permitted assigns of the Optionee.

9. No Rights of Stockholders . Neither the Optionee nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any shares of Stock purchasable or issuable upon the exercise of the Option, in whole or in part, prior to the date of exercise of the Option.

10. Acceleration of Exercisability of Option .

(a) This Option shall become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, (i) the Company exercises its discretion to provide a cancellation notice with respect to the Option pursuant to Section 6(b)(ii) hereof, or (ii) the Option is terminated pursuant to Section 6(b)(i) hereof.

(b) This Option [shall] [shall not] become immediately fully exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof, and during the Optionee's Continuous Service, there is a “Change in Control”, as defined in Section 9(b) of the Plan.

11. No Right to Continued Employment . Neither the Option nor this Agreement shall confer upon the Optionee any right to continued employment or service with the Company.

12. Law Governing . This Agreement shall be governed in accordance with and governed by the internal laws of the State of Georgia.

13. Interpretation / Provisions of Plan Control . This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the Committee as may be in effect from time to time. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Optionee accepts the Option subject to all the terms and provisions of the Plan and this Agreement. The undersigned Optionee hereby accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan and this Agreement, unless shown to have been made in an arbitrary and capricious manner.

14. Notices . Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s Secretary at 4619 Steeplechase Lane, Flowery Branch, GA 30542, or if the Company should move its principal office, to such principal office, and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

15. Market Stand-Off Agreement . In the event of an initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, the Optionee agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration) acquired pursuant to the exercise of the Option, without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters.

16. Optionee’s Representations . In the event that the Company’s issuance of the Shares purchasable pursuant to the exercise of this Option has not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached to this Agreement as Exhibit A or in such other form as the Company may request.

17. Tax Consequences . Set forth below is a brief summary as of the date of this Option Agreement of some of the federal tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a) The Optionee will not recognize any income on receipt of the Option.

(b) The Optionee will recognize ordinary income at the time he exercises the Option equal to the amount by which the Fair Market Value of the Shares on the date of exercise exceeds the Exercise Price paid for the Shares. The amount so recognized is subject to income tax withholding and employment taxes if the Optionee is an employee of the Company or a Related Entity.

(c) The Optionee’s tax basis for the Shares received as a result of the exercise of the Option will be equal to the Fair Market Value of those Shares on the date the Option is exercised.

(d) Upon the sale of the Shares, the Optionee will recognize a capital gain or loss on the difference between the amount realized from the sale of the Shares and the Fair Market Value on the date the Option is exercised. The gain or loss would be short- or long-term depending upon whether the Shares were held for at least one year after the date of exercise of the Option.

The foregoing discussion assumes that, and only is applicable if, the fair market value of the Shares as of the date on which the Option is granted is not significantly less than the Exercise Price. The Company believes that it has made a good faith effort to determine the fair market value of the Shares and does not believe that the Exercise Price is significantly less than the fair market value of the Shares on the Date of Grant. No assurances can be given, however, that the Internal Revenue Service would not take a contrary position. It is possible that if the fair market value is determined to be significantly greater than the Exercise Price, the Internal Revenue Service may take the position that the Option is not in effect a stock option but should be treated as restricted stock for tax purposes. The Optionee should consult with his or her own tax advisors as to whether any action should be taken to minimize these risks.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the ____ day of ______________, ______.

	COMPANY:

	VYSTAR CORPORATION

By:

Title:

The Optionee acknowledges receipt of a copy of the Plan and represents that he or she has reviewed the provisions of the Plan and this Option Agreement in their entirety, is familiar with and understands their terms and provisions, and hereby accepts this Option subject to all of the terms and provisions of the Plan and the Option Agreement. The Optionee further represents that he or she has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement.

Dated:			OPTIONEE:
			By:

EXHIBIT A

INVESTMENT REPRESENTATION STATEMENT

PURCHASER	:

COMPANY	:	VYSTAR CORPORATION

SECURITY	:	COMMON STOCK

AMOUNT	:

DATE	:

In connection with the purchase of the above-listed Securities, I, the Purchaser, represent to the Company the following:

(a) I am aware of the Company’s business affairs and financial condition, and have acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. I am purchasing these Securities for my own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended (the "Securities Act").

(b) I understand that the Company’s issuance of the Securities has not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein. In this connection, I understand that, in the view of the Securities and Exchange Commission (the "SEC"), the statutory basis for such exemption may be unavailable if my representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future.

(c) I further understand that the Securities must be held indefinitely unless the transfer is subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. Moreover, I understand that the Company is under no obligation to register any transfer of the Securities. In addition, I understand that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless registered or such registration is not required in the opinion of counsel for the Company.

(d) I am familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of issuance of the Securities, such issuance will be exempt from registration under the Securities Act. In the event the Company later becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter the securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including among other things: (1) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about the Company, and the amount of securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), if applicable. Notwithstanding this paragraph (d), I acknowledge and agree to the restrictions set forth in paragraph (e) hereof.

In the event that the Company does not qualify under Rule 701 at the time of issuance of the Securities, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires among other things: (1) the availability of certain public information about the Company, (2) the resale occurring not less than one year after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than two years, (3) the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable.

(e) I further understand that in the event all of the applicable requirements of Rule 144 or Rule 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 and Rule 701 are not exclusive, the Staff of the SEC has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or Rule 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

Signature of Purchaser:

Date: _____________________ ]

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) made and entered into on this 1st day of April, 2008 (the "Effective Date"), by and between Vystar Corporation, a Georgia corporation (the "Company"), and Sandra Parker, a resident of the State of Georgia ("Employee").

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings specified below:

" Business " - the research, development, manufacturing, marketing, sales, distribution and offering of products and services related to low-protein natural rubber latex raw materials and products offered by the Company as of the Effective Date and as may be offered by Company during the term of this Agreement .

“Competitor” - means any Person (as defined herein) offering products or services in competition with Company or any of its subsidiaries, specifically any Person offering or involved in the research, development, manufacturing, marketing, selling and/or distribution of any low-protein natural rubber latex raw material or product .

" Confidential Information " - information relating to the operations, customers, or finances of the Company, or the Business, that derives value from not being generally known to other Persons, including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, and lists of or identifying information about actual or potential customers or suppliers, including all customer lists, whether or not reduced to writing, certain patented and unpatented information relating to the research and development, manufacture or serving of the Company's products, information concerning proposed new products, market feasibility studies and proposed or existing marketing techniques or plans, and all information defined as a “Trade Secret” pursuant to the Georgia Trade Secrets Act or otherwise by Georgia law. Confidential Information also includes the same types of information relating to the operations, customers, finances, or Business of any affiliate of the Company, if such information is learned by Employee during the term of this Agreement or in connection with Employee's performance of Services. Con-fidential Information also includes information disclosed to the Company by third parties that the Company is obligated to maintain as confiden-tial. Confidential Information may include information that is not a Trade Secret, but Confiden-tial Information that is not also a Trade Secret shall constitute Confidential Information only for five (5) years after the Termination Date. Confidential Information does not include information generally available to the public through no violation of a confidentiality or non-disclosure obligation owed to Company;

" Person " - any individual, corporation, partnership, limited liability company, association, municipality, government agency, government, unin-corporated organization or other entity;

" Services " - the duties and functions that Employee shall provide in the Territory as an employee of the Company and as further outlined on Exhibit B;

" Termination Date " - the last day Employee is employed by the Com-pany, whether the termination is voluntary or involuntary and whether with or without cause;

“Territory” - shall be the geographic region in which Employee initially and/or at anytime throughout the term of this Agreement provides the Services. Territory shall be more fully described in Exhibit B along with Employee’s description of Services.

2. Employment: The Company agrees to employ Employee and Employee agrees that Employee will devote Employee’s full productive time, skill, energy, knowledge and best efforts during the period of Employee’s employment to such duties as the Board of Directors of the Company and/or the Employee’s Direct Supervisor (as identified in Section 5 below) may reasonably assign to Employee, and Employee will faithfully and diligently endeavor to the best of Employee’s ability to further the best interest of the Company during the period of Employee’s employment. However, Employee is not prohibited from making personal investments in any other businesses, as long as those investments do not require Employee to participate in the operation of the companies in which Employee invests and such other businesses are not in competition with the Company or any of its subsidiaries (“Competitor”). Employee may invest in any publicly traded company registered on a bona fide stock exchange without reservation.

3. Terms of Employment: Employee's employment will begin on the _______ day of ___________, 20__, and will continue unless one party gives the other party of such intent to not renew ninety (90) days prior to each annual anniversary date, unless earlier terminated in accordance with Section 9 herein. Notwithstanding, the foregoing, the first 180 days of Employee’s employment shall be a probationary period during which Company may terminate Employee without cause and without the obligation of the Severance Payment, as described in Section 10.c. Effect of Termination (“Probationary Period”). Termination of this Agreement during the Probationary Period shall be effective upon written notice to Employee. At Company’s election, in the event of Company’s termination of Employee without cause during the Probationary Period, Company may elect to activate the Noncompete provisions. In the event of Company’s termination of Employee for cause, whether in the Probationary Period or otherwise, Employee shall be obligated to comply with the Noncompete covenants.

4. Compensation: On the terms and subject to the conditions of this Agreement, (i) the Company will pay Employee a salary and a bonus determined in accordance with Schedule A, (ii) Employee will be entitled to participate in the Company’s Employee Stock Option Plan as may be in effect from time to time, and (iii) the Company will provide Employee with employee benefits consistent with those provided by the Company to similarly situated executives. The Company’s Employee Stock Option Plan will be distributed to Employee. The employee benefits provided by the Company as of the date hereof shall also be distributed to Employee. The Company reserves the sole and unilateral right to modify any and all employee benefits at any time in its sole discretion.

5. Title, Duties and Conduct of Employee: The Employee’s initial title shall be Executive Vice President Sales and Marketing, and shall report to William R. Doyle, President & COO, as Employee’s Direct Supervisor. Employee shall perform such duties and functions for the Company as shall be specified from time to time by the Chairman or Board of Directors of the Company, and/or the Employee’s Direct Supervisor, including, but not limited to the duties and functions expressly set forth on Schedule B, and which are consistent with Employee's duties set forth on Schedule B (“Services”).

a. Disparagement. Employee shall not at any time make false, misleading or disparaging statements about the Company, including the Business, management, employees and/or Customers.

6. Paid Time Off, Illness or Incapacity: Employee is entitled to vacation paid time off and absence from Employee’s duties during regular work hours for a total of four (4) weeks each calendar year. Employee shall be entitled to paid time off for sick leave pursuant to Company policy. If Employee cannot perform his/her duties because of major illness or incapacity for more than a total of ninety (90) days in any year, the Company may terminate this Agreement upon thirty (30) days' written notice to Employee. Employee is not entitled to receive, and the Company shall not be required to pay, Employee's compensation hereunder for absences because of major illness or incapacity other than the total of ninety (90) days in each year granted to Employee under this Section 6.

7. Termination of Agreement Upon Sale or Termination of Company's Business:

a. Not--with-standing anything to the contrary contained in this Agreement, the Company may terminate Employee's employment upon thirty (30) days' written notice to Employee upon the occurrence of any of the following events:

(1) The acquisition, directly or indirectly, of any "person" (excluding any "person" who on the date hereof owns or controls ten percent (10%) or more of the voting power of the Company's common stock), as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, within any twelve (12) month period of securities of the Company representing an aggregate of fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; provided, that for purposes of this Paragraph (a), "acquisition" shall not include shares which are received by a person through gift, inheritance, under a will or otherwise through the laws of descent and distribution;

(2) During any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company (the "Board"), cease for any reason to constitute at least a majority thereof, unless the election of each new director was approved in advance by a vote of at least a majority of the directors then still in office who were directors at the beginning of such period; or

(3) The occurrence of any other event or circumstance which is not covered by (1) or (2) above which the Board determines affects control of the Company and, in order to implement the purposes of this Agreement, adopts a resolution that such event or circumstance constitutes an “event” under this Paragraph 7.

b. If the Company terminates Employee pursuant to Paragraph 7(a), Company will, for the Severance Period (as defined in Paragraph 10(c)), pay Employee her then current salary and provide Employee with Group Health Insurance, but Company shall not be required to pay any other compensation or provide any other benefits.

8. Ownership of Information

a. Work For Hire Acknowledgment; Assignment. All writings, draw-ings, photographs, tapes, recordings, computer programs and other works in any tangible medium of expression, regardless of the form of medium, which have been or are prepared by Employee, or to which Employee contributes, in connection with Employee's employ-ment by the Company, whether patented, copyrighted, trademarked or otherwise (collectively the "Works") and all copyrights, patents, trademarks and other rights in and to the Works, belong solely, irrevocably and exclusively throughout the world to the Company as works made for hire. However, to the extent any court or agency should conclude that the Works (or any of them) do not constitute or qualify as a "work made for hire," Employee hereby assigns, grants and delivers, solely, irrevocably, exclusively and throughout the world to the Company all ownership and other rights to the Works. Employee also agrees to cooperate with the Company and to execute such other further grants and assignments of all rights as the Company from time to time reasonably may request for the purpose of evidencing, enforcing, filing, registering or defending its ownership of the Works and the copyrights in them, and Employee hereby irrevoca-bly constitutes and appoints the Company as Employee's agent and attorney-in-fact, with full power of substitu-tion, in Employee's name, place and stead, to execute and deliver any and all such assignments or other instruments which Employee shall fail or refuse promptly to execute and deliver, this power and agency being coupled with an interest and being irrevo-cable. Without limiting the preceding provisions of this Paragraph 8(a), Employee agrees that the Company may edit and otherwise modify, and use, publish and otherwise exploit, the Works in all media and in such manner as the Company, in its discretion, may determine.

9. Nonsolicitation; Noncompetition .

a. Non-Solicitation of Customers. During the term of this Agreement, and for one (1) year after the Termination Date, Employee will not solicit Customers within the Territory for the purpose of providing products or services comparable to those provided by the Business, except on behalf of the Company.

b. Non-Solicitation of Company Employees. During the term of this Agreement and for one (1) year after the Termination Date, Employee will not solicit for employment with another Person anyone who is an employee of the Company.

c. Non-Compete. During the term of this Agreement and for one (1) year after the Termination Date, Employee will not provide services substantially similar to Services within the Territory to any Competitor. Employee shall be prohibited from providing in the Territory in competition with the Company in accordance with the terms of this Agreement, including the Services expressly set forth on Schedule B attached hereto. Employee acknowledges that Employee has been informed of and discussed with the Company the specific activities that Employee will perform as Services and that Employee understands the scope of the activities that constitute Services and the Territory under this Agreement.

d. Future Employment Opportunities. Prior to and for one (1) year after the Termination Date, Employee shall (a) provide any employer with a copy of this Agreement, and (b) upon accepting any position, provide the Company with the employer's name and a description of the services, if any, Employee will provide for such employer.

10. Termination . At all times, Employee’s employment shall be subject to “employment at will”. This Agreement and the employment of Employee may be terminated as follows:

a. Without Cause . Either party may terminate this Agreement upon thirty (30) days notice to the other party.

b. For Cause.

(1) By the Company (i) pursuant to Paragraphs 6 or 7, (ii) upon conviction of the Employee of any felony or material misdemeanor under federal, state or local laws or ordinances, except traffic violations (iii) upon the failure of Employee to diligently or competently discharge the duties assigned to him pursuant to this Agreement; or

(2) (i) By Employee upon thirty (30) days' written notice to the Company for any breach of this Agreement by Company and failure to cure within that thirty (30) day notice period; or

(4) By the Company upon the death of Employee.

c. Effect of Termination.

(1) In the event Employee is terminated by the Company without cause (other than during the Probationary Period pursuant to Paragraph 3 the Company shall (i) pay Employee his then current salary and provide Employee with Group Health Insurance, but no other compensation or benefits, for three (3) months (“Severance Period”) beginning with the date of termination (“Severance Payment”). If Employee is terminated for cause or Employee terminates this Agreement without cause, Employee shall be entitled only to compensation accrued through the date of Termination and all benefits accrued as of such date, and shall not be entitled to any Severance Payment described herein, but shall remain obligated to the Non-Compete and Non-Severance obligations.

11. Miscellaneous .

a. Assignability.

(2) This is a personal agreement on the part of Employee and may not be sold, assigned, transferred or conveyed by Employee.

d. Entire Agreement . This Agreement, together with the Employee confidential Information, Copyright and Invention Assignment Agreement, attached hereto as Exhibit C, states the entire agreement and understanding between the parties and supersedes all prior understandings and agreements.

e. No Modification . No change or modification to this Agreement shall be valid unless in writing and signed by both parties hereto.

h. Jury Trial Waiver . Both parties hereby waive their right to a trial by jury in the event of any dispute or cause of action regarding this Agreement.

IN WITNESS WHEREOF , the undersigned have executed this Agreement as of the day and year first above written.


	VYSTAR CORPORATION

	By:
		Name: William R. Doyle
		Title: CEO


	EMPLOYEE:


		Name: Sandra Parker

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Schedule A - Salary and Bonus

Annual Salary. $95,000*

Salary. Company shall pay Employee a Monthly Salary of $7,916.00* The Monthly Salary shall be payable bi-weekly according to the Company’s established payroll periods.

* The salary may be adjusted upon the introduction of a mutually agreed-upon commission and/or bonus structure.

Bonus. For the first six (6) months of Employee’s employment, Employee shall receive in addition to her Salary a guaranteed bonus of Five Thousand Dollars ($5,000) per month, which shall be divided equally among the scheduled payroll periods for each month, and payable as part of the standard, scheduled payroll for each month. Thereafter, a further bonus structure may be made available to Employee depending upon the Company and Employee performance, at Company’s complete and sole discretion. Such bonus structure may alter the base and/or commission compensation described herein.

Commission . It is anticipated by both parties that a commission structure will be mutually agreed upon at some point during the term of this Agreement. Such commission structure may alter the base salary and/or bonus compensation described herein.

Stock Option Grant. Employee shall be granted 200,000 stock options at the strike price of $1/share pursuant to Company’s current 2004 Long-Term Incentive Compensation Plan, which shall vest according to the following schedule:

50,000 vesting upon the execution of this Agreement and the execution of the corresponding Stock Option Agreement effecting the stock option grant.

50,000 vesting each of the next 3 years upon the anniversary date of the execution of the Stock Option Agreement.

Employee may be awarded additional option grants at the Company’s and/or her Supervisor’s sole discretion. In all cases, the execution of a Stock Option Agreement shall be required in order to effect any such grant.

Schedule B - Duties and Functions (“Services”)

Employee shall be responsible for implementing and overseeing, including all budgetary and revenue responsibility, for all Company sales and marketing activities and initiatives. The Territory for Employee’s scope of Services responsibility shall be the world-wide.

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Schedule C

Employee Confidential Information, Copyright and Invention Assignment Agreement

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of our report dated September 15, 2008 relating to the financial statements of Vystar Corporation, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.


	/s/ Habif, Arogeti & Wynne, LLP (formerly Tauber & Balser, P.C.) Habif, Arogeti & Wynne, LLP Atlanta, Georgia November 13, 2008