UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-QSB

      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                  For the quarterly period ended March 31, 2006

                         Commission File No. 33-55254-28

                             INNOVATE ONCOLOGY, INC.
             (Exact name of registrant as specified in its charter)

             NEVADA                                       87-0438641
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                712 Fifth Avenue, 19th Floor, New York, NY 10019
                -------------------------------------------------
                    (Address of principal executive offices)

        Registrant's telephone number including area code: (646) 723-8944

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes |X| No |_|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                 Yes |_| No |X|

The number of shares outstanding of the registrant's common stock, par value
$0.001, as of May 15, 2006, was 27,000,000.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|
<PAGE>

                             INNOVATE ONCOLOGY, INC.

                Form 10-QSB for the quarter ended March 31, 2006

                                      Index

                                                                           Page

                         Part I - FINANCIAL INFORMATION

Item 1.    Financial Statements                                              3

Item 2.    Management Discussion and Analysis or Plan of Operation          10

Item 3.    Controls and Procedures                                          21

                           Part II - OTHER INFORMATION

Item 1.    Legal Proceedings                                                21

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds      21

Item 3.    Default on Senior Securities                                     21

Item 4.    Submission of Matters to a Vote of Security Holders              21

Item 5.    Other Information                                                21

Item 6.    Exhibits and Reports on Form 8-K                                 21

Signatures                                                                  22


                                       2
<PAGE>

                             INNOVATE ONCOLOGY, INC.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

                                                                     March 31,
                                                                        2006

ASSETS
Current Assets
Cash and cash equivalents                                           $     1,062
                                                                    -----------
TOTAL ASSETS                                                        $     1,062
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable                                                    $   260,346
Accrued expenses                                                         25,000
Due to Resistys, a 50% owned Subsidiary                                 833,430
Due to Sterling FCS and Avantogen Limited, related parties              465,000
Note payable to Gardant Pharmaceuticals, majority stockholder         4,802,928
                                                                    -----------
TOTAL LIABILITIES                                                     6,386,704
                                                                    -----------

Commitments                                                                   0

STOCKHOLDERS' DEFICIT
Preferred Stock, 25,000,000 shares authorized;
none issued and outstanding                                                   0
Common Stock, par value $0.001; 125,000,000 shares
authorized, 18,178,242 issued and outstanding                            18,178
Additional paid in capital                                              713,072
Deficit accumulated during development stage                         (7,116,892)
                                                                    -----------
Total Stockholder's Deficit                                          (6,385,642)
                                                                    -----------
                                                                    $     1,062
                                                                    ===========

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


                                       3
<PAGE>

                             INNOVATE ONCOLOGY, INC
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      Three Months        Three Months        From Inception
                                                         Ended               Ended            July 21, 2004
                                                        March 31,           March 31,          to March 31,
                                                          2006                 2005                 2006
                                                      ------------         ------------         ------------
<S>                                                   <C>                  <C>                  <C>
Operating expenses

Research and development                              $    571,179         $    284,370         $  4,465,754
General and administrative                                 361,340            1,437,347            2,450,323

                                                      ------------         ------------         ------------
Net operating loss                                        (932,519)          (1,721,717)          (6,916,077)

Loan interest expense                                      (49,830)                --               (200,815)

                                                      ------------         ------------         ------------
Loss attributable to common stockholders                  (982,349)          (1,721,717)          (7,116,892)

Other comprehensive income
Foreign currency translation adjustments                      --                   --                   --
                                                      ------------         ------------         ------------
Total comprehensive loss                              $   (982,349)        $ (1,721,717)        $ (7,116,892)
                                                      ============         ============         ============

Net loss per share, basic and diluted                 $      (0.05)        $      (0.10)
                                                      ============         ============

Weighted average number of shares outstanding,
basic and diluted                                       18,178,000           17,953,000
                                                      ============         ============
</TABLE>

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


                                       4
<PAGE>

                             INNOVATE ONCOLOGY, INC
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                From July 21, 2004 (inception) to March 31, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                           Total
                                                                        Common Stock         Paid -In     Accumulated  Stockholders'
                                                                    Shares        Amount      Capital       Deficit       Deficit
<S>                                                               <C>          <C>          <C>           <C>           <C>
Balance at inception - July 21, 2004                              $ 1,453,242  $     1,453  $    (1,453)  $      --     $      --

Shares issued on reorganization October 01, 2004                   16,500,000       16,500      (16,500)         --            --

Net loss for the period ended December 31, 2004                          --           --           --      (1,120,037)   (1,120,037)
                                                                  -----------  -----------  -----------   -----------   -----------
Balance as of December 31, 2004                                    17,953,242       17,953      (17,953)   (1,120,037)   (1,120,037)

Shares issued to consultants on October 19, 2005 @ $3.25              225,000          225      731,025          --         731,250

Net loss for the year ended December 31, 2005                            --           --           --      (5,014,506)   (5,014,506)
                                                                  -----------  -----------  -----------   -----------   -----------
Balance as of December 31, 2005                                    18,178,242       18,178      713,072    (6,134,543)   (5,403,293)
                                                                  -----------  -----------  -----------   -----------   -----------

Net loss for the quarter ended March 31, 2006                            --           --           --        (982,349)     (982,349)

                                                                  -----------  -----------  -----------   -----------   -----------
Balance as of March 31, 2006                                       18,178,242  $    18,178  $   713,072   $(7,116,892)  $(6,385,642)
                                                                  ===========  ===========  ===========   ===========   ===========
</TABLE>

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


                                       5
<PAGE>

                             INNOVATE ONCOLOGY, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         Three Months           Three Months       From Inception
                                                                             Ended                  Ended         July 21, 2004 to
                                                                           March 31,              March 31,           March 31,
                                                                             2006                   2005                2006
                                                                          -----------            -----------         -----------
<S>                                                                       <C>                    <C>                 <C>
Cash flows from operating activities :
Net loss                                                                  $  (982,349)           $(1,721,717)        $(7,116,892)

Adjustment to reconcile net loss to cash from
operating activities :

Non-cash stock compensation                                                      --                     --               731,250
Non-cash stock compensation included in note payable                             --                     --               966,791
Accrued interest included in note payable                                      49,830                 14,000             200,815

Changes in operating assets and liabilities :

Prepaid expenses                                                                 --                   42,106                --
Accounts payable                                                                1,213                   --               260,346
Accrued expenses                                                              (55,000)                10,000              25,000
Amounts due to related parties                                                580,335                 30,000           1,298,430
                                                                          -----------            -----------         -----------
Net cash from operating activities                                           (405,971)            (1,639,611)         (3,634,260)
                                                                          -----------            -----------         -----------

Cash flows from financing activities

Proceeds from note payable to related party                                   405,875              1,625,611           3,635,322
                                                                          -----------            -----------         -----------
Net cash from financing activities                                            405,875              1,639,611           3,635,322
                                                                          -----------            -----------         -----------

Effect of changes in exchange rates                                              --                     --                  --
                                                                          -----------            -----------         -----------
Net increase in cash and cash equivalents                                         (96)                  --                (1,062)

Cash and cash equivalents at beginning of the period                            1,158                   --                  --
                                                                          -----------            -----------         -----------
Cash and cash equivalents at the end of the period                        $     1,062            $      --           $     1,062
                                                                          ===========            ===========         ===========
Supplemental disclosures
Cash paid for :
Interest                                                                         --                     --                  --
Taxes                                                                            --                     --                  --
</TABLE>

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


                                       6
<PAGE>

                             INNOVATE ONCOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 1 - Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Innovate Oncology, Inc. (the "Company") Annual Report on Form 10-KSB for the
year ended December 31, 2005. The material under the heading "Management's
Discussion and Analysis or Plan of Operation" is written with the presumption
that the readers have read or have access to the 2005 Annual Report on Form
10-KSB, which contains Management's Discussion and Analysis or Plan of Operation
as of December 31, 2005 and for the year then ended.

Principles of Consolidation

The consolidated financial statements include the accounts of Innovate Oncology,
Inc. (a Delaware corporation) and its wholly owned subsidiaries, Innovative
Oncology, Limited. (a United Kingdom company) and Cynat Oncology, Inc. (a
Delaware corporation). In addition, Cynat Oncology Limited (a United Kingdom
company), wholly owned by Cynat Oncology, Inc, is a 50% owner of Resistys, Inc.
(a Delaware corporation) and accounts for its investment in Resistys on the
equity method. Innovate Oncology, Inc., a Nevada corporation, and its
wholly-owned subsidiary, Innovate Oncology, Inc., a Delaware corporation, and
its respective wholly owned subsidiaries, Innovative Oncology Limited and Cynat
Oncology, Inc., are collectively hereinafter referred to as the "Company" except
where it would be inappropriate to refer to any entity other than the parent
company, Innovate Oncology, Inc., a Nevada corporation. All significant
inter-company accounts and transactions have been eliminated.

In the opinion of management, the unaudited financial statements contain all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the balance sheet as of March 31, 2006 and the statements of
operations and cash flows for the three months ended March 31, 2006. The results
of operations for the three months ended March 31, 2006 are not necessarily
indicative of the results of operations to be expected for the entire fiscal
year ending December 31, 2006.

NOTE 2 - Going Concern

The accompanying consolidated financial statements have been prepared on the
basis of accounting principles applicable to a going concern, which assume that
the Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations. However, as of March 31, 2006, the Company did not have significant
cash or other material assets, nor did it have an established source of revenues
sufficient to cover its operating costs and allow it to continue as a going
concern. The Company is presently entirely dependent for its capital
requirements on a credit facility of $5 million advanced by its major
shareholder, Gardant Pharmaceuticals, Inc. ("Gardant").

The Company's future capital requirements will depend upon numerous factors
including, but not limited to, continued progress in developing its products,
market penetration and profitable operations from the sale of its products.
These financial statements do not reflect adjustments that would be necessary if
the Company were unable to continue as a going concern. While members of the
Company's management have been successful in raising capital for other ventures
in the past, and plan to raise equity capital for the Company, there can be no
assurance that these plans will be achieved in sufficient amounts, on acceptable
terms, in timely fashion or at all.

During this quarter, the Company has entered into a binding Share Exchange
Agreement (the "Agreement") executed on February 1, 2006, with Avantogen and
Bioaccelerate (now Gardant). Under the terms of the Agreement, Avantogen will
transfer its 50% interest in Resistys, $1,000,000 in cash, and either rights to
a drug compound chosen by Avantogen and satisfactory to the Company or an
additional $100,000, in exchange for 32 million shares of Innovate Common Stock
to be issued to Avantogen or its designee. The Company expects the transaction
to be completed in May, 2006. It is a condition to the Agreement that on or
prior to closing, the outstanding credit agreement with Gardant will be
terminated and no amounts shall remain due to Gardant in respect of the credit
line.


                                       7
<PAGE>

In addition, Gardant has agreed to take over all other liabilities excluding
those directly related to Resistys and Avantogen. As of March 31, 2006, the
amounts directly related to Resistys and Avantogen included in these financial
statements are $898,430.

NOTE 3 - Stock Based Compensation

The Company adopted the provisions of Statement of Financial Accounting
Standards No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R"), on January
1, 2006. Accordingly, compensation costs for all share-based awards to employees
are measured based on the grant date fair value of those awards and recognized
over the period during which the employee is required to perform service in
exchange for the award (generally over the vesting period of the award). The
Company has not issued options to employees and has no awards with market or
performance conditions. Excess tax benefits as defined by SFAS 123R will be
recognized as an addition to additional paid-in-capital. Effective January 1,
2006 and for all periods subsequent to that date, SFAS 123R supersedes the
Company's previous accounting under Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25"). In March 2005, the
Securities and Exchange Commission issued Staff Accounting Bulletin No. 107
("SAB 107") relating to SFAS 123R. The Company has applied the provisions of SAB
107 in its adoption of SFAS 123R.

The Company adopted SFAS 123R using the modified prospective transition method,
which provides for certain changes to the method for valuing share-based
compensation. The valuation provisions of SFAS 123R apply to new awards and to
awards that are outstanding at the effective date and subsequently modified or
cancelled. Estimated compensation expense for awards outstanding at the
effective date will be recognized over the remaining service period using the
compensation cost calculated for pro forma disclosure purposes under FASB
Statement No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). In
accordance with the modified prospective transition method, the Company's
consolidated financial statements for prior periods were not restated to
reflect, and do not include, the impact of SFAS 123R.

No options were granted or vested during the interim periods presented,
therefore no compensation costs were incurred under SFAS 123R and the actual net
loss equals the pro forma net or loss for such interim periods.

Stock options and warrants issued to non-employees are recorded at their fair
value as determined in accordance with SFAS No. 123 and Emerging Issues Task
Force (EITF) No. 96-18, Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring or in Conjunction With Selling Goods or
Services, and recognized over the related service period. During fiscal 2004,
the Company issued 1,000,000 common stock warrants at an exercise price of $1
per share expiring July 21, 2009. The value of these warrants, determined using
the Black-Scholes pricing model with the following assumptions: 60 months
expected life, 100% stock volatility, 3.625% risk-free interest rate and no
dividends, was immaterial. As a consequence of the Agreement with Avantogen the
Company and the warrant holder agreed that all of these warrants outstanding
will be cancelled.

NOTE 4 - Loss per Share

In accordance with SFAS No. 128, Earnings per Share, and SEC Staff Accounting
Bulletin (SAB) No. 98, basic net loss per common share is computed by dividing
net loss for the period by the weighted average number of common shares
outstanding during the period. Under SFAS No. 128, diluted net income (loss) per
share is computed by dividing the net income (loss) for the period by the
weighted average number of common and common equivalent shares, such as stock
options and warrants, outstanding during the period. Such common equivalent
shares have not been included in the computation of net loss per share as their
effect would be anti-dilutive.

Numerator - Net loss                                               $   (982,349)

Denominator- Weighted average shares outstanding                     18,178,000

Net loss per share                                                 $      (0.05)

Incremental common shares (excluded from the
Denominator because they are anti-dilutive)
Warrants                                                              1,000,000

These warrants were issued to Gardant in connection with the credit facility.
Gardant has agreed to cancel these warrants as part of the Share Exchange
Agreement with Avantogen


                                       8
<PAGE>

NOTE 5 - Amounts due to Related Parties

As of March 31, 2006 the Company had an amount of $420,000 outstanding to
Sterling FCS Ltd under an annual contract for the provision of corporate and
financial services at a cost of $10,000 per month. Additional specific
consultancy services amounting to $200,000 have also been provided during the
first quarter of 2006 and included in the amount outstanding mentioned above. In
addition, the Company owes $45,000 to Avantogen and $833,430 to Resistys, as
part of the Company's 50% equity in that Susbsidiary's losses through March 31,
2006.

NOTE 6 - Note payable to Related Party

On July 22, 2004, the Company entered into a secured credit facility for $5.0
million with Bioaccelerate Inc, which bears interest at the Applicable Federal
Rate as defined in Section 1274(d) of the Internal Revenue Code of 1986. The
interest rate as of March 31, 2006 was 4.44%. The Company intends to use these
funds to develop its lead products. The facility is secured by all tangible and
intangible assets. As an inducement to Bioaccelerate Inc. to provide the credit
facility, the Company issued warrants to purchase 1,000,000 shares of its common
stock at an exercise price of $1.00 per share expiring on July 22, 2009. No
value was assigned to these warrants. Cumulative accrued interest as of March
31, 2006 amounts to $200,815. Total due as of March 31, 2006 was $4,802,928,
excluding interest. The Company has drawn down $4,602,113 of the facility.

NOTE 7 - Commitments and Contingencies

Bioaccelerate entered into various drug development and licensing agreements
with leading medical research, academic and private pharmaceutical companies.
Innovate, as a defined "affiliate" of Bioaccelerate under certain of those
agreements, is already a licensee under the terms of certain of those
agreements. On March 16, 2005, Bioaccelerate also assigned some of those
agreements to Innovate in order to pursue a plan to grant rights to various
compounds from Bioaccelerate's drug portfolio. The assignments are generally
subject to written consent by the other party to the license agreement, which
consent cannot be unreasonably withheld, and in one case payment by
Bioaccelerate of some additional consideration to the other party to the license
agreement.

In addition, Innovate is already a party to certain licensing agreements. Until
Innovate secures additional equity capital or other financing, Innovate is
entirely dependent upon financial support by its major shareholder,
Bioaccelerate, to satisfy these commitments and all of the Company's other
capital requirements. If, at any time, Innovate should have insufficient capital
to satisfy the expenditure requirements under the licensing agreements or its
other capital requirements, the Company's business and prospects could be
materially adversely affected and its rights to develop the compounds covered by
the license agreements could be lost or adversely affected.

The Company utilizes office space in New York and London on a month to month
basis in return for payments to Bioaccelerate Holdings, Inc. amounting to
approximately $9,500 per month, in the aggregate.

NOTE 8 - Subsequent Events

Avantogen Limited (formerly Australian Cancer Technologies Limited)
("Avantogen"), is a biotechnology company focused on oncology products and
traded on the Australian Stock Exchange under the symbol "ACU". Avantogen formed
Resistys, Inc. ("Resistys") in August 2004 as a wholly owned subsidiary
incorporated in Delaware and obtained the North American license to develop and
market a pancreatic cancer drug known as RP101. On October 5, 2004,
Bioaccelerate and Avantogen entered into a joint venture agreement to co-develop
RP101 and share the exclusive rights to market the product in North America with
each controlling 50% in the subsidiary Resistys. On January 17, 2005
Bioaccelerate assigned 100% of its shares in Resistys to a wholly owned
subsidiary, Cynat Oncology Limited ("Cynat"). Bioaccelerate transferred 100% of
the capital stock of Cynat to the Company on March 16, 2005. As a result, the
Company controls 50% of Resistys and RP101. The Company also refers to the
compound RP101 as INOC-001.

After extensive negotiations, the Company, Avantogen and Bioaccelerate entered
into a binding Share Exchange Agreement (the "Agreement") executed on February
1, 2006. The Agreement is filed as Exhibit 10.1 to the Company's Current Report
on Form 8-K filed on February 7, 2006 and is specifically incorporated herein by
reference.


                                       9
<PAGE>

Under the terms of the Agreement, Avantogen will transfer its 50% interest in
Resistys, $1,000,000 in cash, and eitherrights to a drug compound chosen by
Avantogen and satisfactory to the Company or an additional $100,000, in exchange
for 32 million shares of Innovate Common Stock to be issued to Avantogen or its
designee As a result of the transaction, Resistys, with its pancreatic
chemo-resistance inhibitor compound which is currently under development, will
be a wholly owned subsidiary of the Company. Avantogen will own, directly or
indirectly, approximately 54.24% of the 59 million shares of the Company's
Common Stock outstanding on a fully diluted basis. The Company expects the
transaction to be completed in May 2006.

It is a condition to the Agreement that on or prior to closing the outstanding
credit line by Bioaccelerate in favor of the Company will have been terminated
and no amounts shall remain due to Bioaccelerate in respect of the credit line.
In consideration for Bioaccelerate agreeing to forgive the outstanding loan,
accepting liability for settlement of various Innovate creditors and projected
costs of the transaction as at completion approximately $8.25 million, Innovate
will issue Bioaccelerate 8,821,758 shares of Common Stock to bring the total
number of outstanding shares of Innovate's Common Stock to 27,000,000 shares.
Therefore only $878,430 of the amounts owing by the Company to creditors as of
March 31, 2006 will remain outstanding.

The transaction with Avantogen to acquire the balance of Resistys will be
treated as a reverse merger for accounting purposes which means that the
accounts of Resistys will provide the historical information for Company.
Resistys Inc is arranging to change its financial year end to December 31 and
complete an audit to December 31, 2005. Within four days of consummation of the
transaction with Avantogen, the Company will file a Current Report on Form 8K
and audited financial statements for Resistys and Pro Forma accounts for the
Company within 71 days of filing of the Form 8K.

The Company had been pursuing financing for a relatively broad portfolio of
products. Instead, the Company has decided to focus its resources at this time
on three particular product candidates rather than proceeding with a plan to
develop a larger portfolio that would require far more substantial commitments.
As a result of this change in strategy, the Company has terminated the
agreements intended to assign to the Company the following products: INOC-002
Chemotherapy Potentiator, INOC-003 Targeted Ruthenium Complex, INOC-010
Polymer-Formulated Camptothecin, INOC-016 HER2 Oncogene Inhibitor, and INOC-019
Prostate Tumor Suppressor. All rights and remaining obligations with respect to
those products revert to the applicable assignor of those rights to the Company.
In reaching this decision, the Company also concluded that such termination
would facilitate the completion of negotiation of the Share Exchange Agreement
with Avantogen, which the Company deemed to be a desirable objective.

On April 11, 2006 Bioaccelerate Holdings, Inc changed its name to Gardant
Pharmaceuticals, Inc.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS : NO ASSURANCES INTENDED

This Form 10-QSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. This filing includes statements regarding our plans,
goals, strategies, intent, beliefs or current expectations. These statements are
expressed in good faith and based upon a reasonable basis when made, but there
can be no assurance that these expectations will be achieved or accomplished.
Sentences in this document containing verbs such as "believe," "plan," "intend,"
"anticipate," "target," "estimate," "expect," and the like, and/or future-tense
or conditional constructions ("will," "may," "could," "should," etc.) constitute
forward-looking statements that involve risks and uncertainties. Items
contemplating, or making assumptions about, actual or potential future sales,
market size, collaborations, trends or operating results also constitute such
forward-looking statements.

Although forward-looking statements in this Report on Form 10-QSB reflect the
good faith judgment of management, such statements can only be based on facts
and factors currently known by management. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from the results and outcomes discussed in,
or anticipated by, the forward-looking statements. Factors that could cause or
contribute to such differences in results and outcomes, include without
limitation, those discussed in our Annual Report on Form 10-KSB for the year
ended December 31, 2005. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Report. We
undertake no obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
Report. Readers are urged to carefully review and consider the various
disclosures made by us in our Annual Report on Form 10-KSB for the year ended
December 31, 2005, which attempt to advise interested parties of the risks and
factors that may affect our business, financial condition, results of operation
and cash flows.


                                       10
<PAGE>

The following discussion should be read along with the Consolidated Financial
Statements and Notes to our audited financial statements for the fiscal year
ended December 31, 2005.

Critical Accounting Policies and Estimates

The preparation of the Company's financial statements requires management to
make certain critical accounting estimates that impact the stated amount of
assets and liabilities at a financial statement date and the reported amount of
income and expenses during a reporting period. These accounting estimates are
based on management's judgment and are considered to be critical because of
their significance to the financial statements and the possibility that future
events may differ from current judgments, or that the use of different
assumptions could result in materially different estimates. The critical
accounting policies and estimates have not changed from and should be read in
conjunction with the Company's Annual Report filed on Form 10-K for the year
ended December 31, 2005. The Company's estimates are reviewed continuously to
ensure reasonableness. However, the amounts the Company may ultimately realize
could differ from such estimated amounts.

Overview

Innovate Oncology, Inc. (the "Company" or "Innovate") acquires, develops and
seeks to commercialize novel compounds to treat various types of cancer. Our
drug pipeline consists of seven drug products, five clinical candidates and two
in pre-clinical development and focuses on multiple forms of cancer, including
three of the most prevalent: breast, prostate and colon cancer.

Bioaccelerate Holdings, Inc. ("Bioaccelerate") is the majority owner of the
Company's common stock. Bioaccelerate is a pharmaceutical development company
incorporated in Nevada and traded on the Over-the-Counter Bulletin Board
("OTCBB") under the symbol OTCBB: BACL. Like the Company, Bioaccelerate enters
into co-development and licensing agreements with leading medical research,
academic and private pharmaceutical companies. On July 21, 2004, Bioaccelerate
sold its UK subsidiary, Innovative Oncology Limited, ("Innovative") to Innovate
Oncology, Inc. ("Innovate Oncology"), a Delaware corporation, in exchange for
100% of the outstanding common stock of Innovate Oncology. As part of that
transaction, Bioaccelerate agreed to assign the licenses, rights and obligations
for six clinical and up to four pre-clinical drug compounds from its portfolio
of drug candidates in development to Innovate Oncology.

On August 23, 2004, Innovate Oncology entered into an agreement with Hampton
Berkshire Insurance & Financial, Inc. ("Hampton") in which Hampton agreed to
acquire 100% of the outstanding common stock of Innovate Oncology. As part of
the transaction, Hampton, a Nevada corporation, canceled 5,026,590 shares of its
common stock, effected a 3.8-for-1 reverse stock split, which reduced its
pre-acquisition outstanding common stock to 1,453,242, and issued 16,500,000
shares of its common stock to Innovate Oncology's shareholders. Contemporaneous
with the close of the acquisition, the Company changed its corporate name from
Hampton to Innovate Oncology, Inc., moved its corporate office to New York, and
replaced all management, corporate officers and directors. At the close of the
acquisition on October 1, 2004, the Company had 17,953,242 shares of common
stock issued and outstanding.

On February 1,2006 the Company, Avantogen and Bioaccelerate entered into a
binding Share Exchange Agreement (the "Agreement") The Agreement is filed as
Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 7,
2006 and is specifically incorporated herein by reference.

Under the terms of the Agreement, Avantogen will transfer its 50% interest in
Resistys, $1,000,000 in cash, and either rights to a drug compound chosen by
Avantogen and satisfactory to the Company or an additional $100,000, in exchange
for 32 million shares of Innovate Common Stock to be issued to Avantogen or its
designee As a result of the transaction, Resistys, with its pancreatic
chemoresistance inhibitor compound which is currently under development, will be
a wholly owned subsidiary of the Company. Avantogen will own, directly or
indirectly, approximately 54.24% of the 59 million shares of the Company's
Common Stock outstanding on a fully diluted basis. The Company expects the
transaction to be completed in the Spring of 2006.

It is a condition to the Agreement that on or prior to closing the outstanding
credit line by Bioaccelerate in favor of the Company will have been terminated
and no amounts shall remain due to Bioaccelerate in respect of the credit line.
In consideration for Bioaccelerate agreeing to forgive the outstanding loan,
accepting liability for settlement of various Innovate creditors and projected
costs of the merger as at completion, Innovate has issued 8,821,758 shares at a
market price of $1.40, bringing the total number of outstanding shares of
Innovate's Common Stock to 27,000,000.


                                       11
<PAGE>

The Company had been pursuing financing for a relatively broad portfolio of
products. Instead, the Company has decided to focus its resources at this time
on three particular product candidates rather than proceeding with a plan to
develop a larger portfolio that would require far more substantial commitments.
As a result of this change in strategy, the Company has terminated the
agreements intended to assign to the Company the following products: INOC-002
Chemotherapy Potentiator, INOC-003 Targeted Ruthenium Complex, INOC-010
Polymer-Formulated Camptothecin, INOC-016 HER2 Oncogene Inhibitor, and INOC-019
Prostate Tumor Suppressor. All rights and remaining obligations with respect to
those products revert to the applicable assignor of those rights to the Company.
In reaching this decision, the Company also concluded that such termination
would facilitate the completion of negotiation of the Share Exchange Agreement
with Avantogen, which the Company deemed to be a desirable objective.

As a consequence of the agreement Mr Sujay Kango ,Chief Executive Officer and Mr
Paul Hopper, Chairman of the Board of Directors have resigned their positions
with the Company. Mr Alan Bowen, Chief Financial Officer and Mr Linden Boyne,
CEO and Company Secretary will resign on completion.

Business Strategy

Large pharmaceutical companies need additional drugs of substantial market
potential to fill depleted development pipelines, particularly since many of
their products will soon be losing patent protection and internal development
may fail to keep up with commercial demand for innovation. Increasingly, those
companies seek to fill that gap by in-licensing drugs at the middle to late
stages of development rather than acquiring compounds at an earlier stage.
In-licensed Phase III products accounted for more 30% of the in-licensing
agreements made by large pharmaceutical companies in 2002, according to Reuters
Business Insight.

Innovate uses a network of relationships it has forged in academia, medical
research centers and industry to in-license or acquire promising early-stage
compounds and existing compounds that can be reformulated, used for new
indications or used with new dosing regimens. We rely upon these relationships
and a product development network to accelerate the time it takes for new
compounds to reach the critical Phase III clinical trial level when a drug is
most attractive to large pharmaceutical companies.

We enter into development, marketing and partnership agreements with contract
research laboratories, industry experts and pharmaceutical companies to develop,
test and seek regulatory approval for our drug candidates. By relying primarily
upon contracts with third parties for research, clinical development and project
management rather than doing that work in-house, we are able to maintain a
limited and less costly infrastructure, particularly as compared with large
pharmaceutical companies. Our management believes that this streamlined
operating strategy has created an efficient and cost-effective route from
early-stage clinical development to a commercial product.

Product Development

A major element of our product development strategy is the use of third-parties
or Contract Research Organizations ("CRO") for drug development at all stages
along the path to market. CROs conduct safety and efficacy tests and clinical
studies and assist us in guiding products through the Food and Drug
Administration ("FDA") and the European Medicines Agency ("EMEA") regulatory
review and approval processes. The Company also uses the contract manufacturing,
formulation and chemistry skills of external providers.


                                       12
<PAGE>

We believe the use of third-parties to develop and manufacture our products has
several advantages over building a comprehensive infrastructure to handle all
such functions in-house. This approach generally gives us more choice and
greater selectivity in the dedicated resources we will concentrate on a
developing product than if those functions were performed by internal personnel
who were required to support the full range of our product development
activities.

We believe that maintaining a limited infrastructure, particularly focused upon
early-stage processes in the drug development path will enable us to develop
products efficiently and cost effectively. Although this approach will allow us
to avoid the expense associated with developing a large internal infrastructure
to support our product development efforts, it also means that we will continue
to be dependent on the ability of outside parties to perform critical functions
for us.

The contract approach to product development requires project management by
professionals with substantial industry experience. We plan to evaluate
prospective additions to our in-house expertise as well as opportunities for
contract and advisory services in areas of critical importance to all of our
proposed products, including the management of current pipeline development
teams. The product development process is designed to identify problems
associated with a proposed product's safety and effectiveness. We also attempt
to reduce the risk that a proposed product will not be accepted in the
marketplace by conducting market research and defining a commercial strategy for
each product candidate. A drug development portfolio cannot be completely
insulated from potential clinical and market failures. It is likely that some
proposed products we select for development will not produce the clinical or
revenue results expected. Additionally, we may choose to license at an early
stage or divest product candidates from our portfolio if they produce clinical
results outside our target sector and/or require financial, development and
management resources better met by larger or more specialized pharmaceutical or
biopharmaceutical companies.

Research and Development

Our primary research and development efforts have focused on identifying
promising compounds and developing them into products to treat various types of
cancer. We outsource with third party laboratories our requirements for
research, pre-clinical studies and clinical development, and also outsource with
third parties our requirements for drug substance and product manufacturing. Our
research and development structure is designed to enable us to evaluate and make
the best choices for where and how projects are run and resourced. Each is
managed as a discrete project with its own budget and project management. When
it's practical and desirable, different projects will use common resources and
contracted facilities.

Our budget projections for research and development are based primarily upon
those established and set out in or pursuant to our agreements with research and
co-development partners. Projects may meet development and regulatory barriers,
however that would require additional work or a change in approach which can
lead to changes in both timing and budget requirements to maintain a product's
path to market. When this situation arises, we tend to be in a more flexible
position to meet such demands than a fully internally resourced pharmaceutical
company that relies on existing internal capabilities to progress.

Competition

The biotechnology and biopharmaceutical industries are characterized by rapidly
advancing technologies, intense competition and a strong emphasis on proprietary
products. Many third-parties compete with us in developing various approaches to
lifestyle disorders. These competitors include the major pharmaceutical
companies, biotechnology companies, academic institutions and other research
organizations.

Many of our competitors have significantly greater financial resources and
expertise in research and development, manufacturing, pre-clinical testing,
conducting clinical trials, obtaining regulatory approval and marketing than we
do. In addition, many of these competitors are active in seeking patent
protection and licensing arrangements in anticipation of collecting royalties
for proprietary technology. Smaller or early-stage companies may also prove to
be significant competitors, particularly through collaborative arrangements with
large and established companies. These third parties compete with us in
recruiting and retaining qualified scientific and management personnel, as well
as acquiring technologies complementary to our programs.

We expect that competition among products approved for sale will be based, among
other things, on efficacy, reliability, product safety, price and patent
position. Our ability to compete effectively and develop products that can be
manufactured cost-effectively and marketed successfully will depend on our
ability to:


                                       13
<PAGE>

o     advance our lead product candidates and technology platforms;

o     obtain required government and other public and private approvals on a
      timely basis;

o     enter into co-development and marketing and sales partnership
      arrangements;

o     license additional technology;

o     maintain a proprietary position in our technologies and products; and

o     attract and retain key personnel.

For these reasons we intend to continue to seek to strengthen the key areas of
the business that we can control in-house effectively and to seek to leverage
what we believe are the key advantages of our business model and strategy:
flexibility, responsiveness, speed and mitigating risks.

Innovate Oncology's Product Portfolio

One in three Americans will be diagnosed with cancer, and two out of three
diagnosed with the disease will die from it, according to Reuters Business
Insight. Our objective is to provide cancer patients with effective and safe
therapeutics that save or prolong their lives. We are developing a diversified
product portfolio targeting multiple forms of cancer The Company's drug pipeline
has three compounds in different stages of development, including a therapeutic
switch of an existing drug that is not indicated currently to treat cancer,
currently in Phase I/II trials; a new chemical entity in pre-clinical testing;
and a reformulation of an approved product in the market indicated to treat
cancer, also completing pre-clinical testing.

Our portfolio is characterized by compounds that have multiple mechanisms of
action, which we believe may substantially increase a compound's clinical
efficacy. Also, more than one of these products are lead compounds derived from
novel technologies with the potential for follow-on compounds to be developed
into separate products for related indications.

Innovate Oncology's Product Pipeline

The table below summarizes the status of our development programs.

<TABLE>
<CAPTION>
                                                                  Phase of Development
                                                  -----------------------------------------------------
Product                  Indication               Pre-Clinical    Phase I     Phase II    Phase III
Candidate
-------------------------------------------------------------------------------------------------------
<S>                      <C>                      <C>             <C>         <C>         <C>
INOC-001     Chemo-Resistance Inhibitor           ||||||||||||||||||||||||||||||||||||

INOC-005     Capridine Beta                       ||||||||||||||||||||||||

INOC-009     Oral Paclitaxal Formulation          ||||||||||||||||||||||||
</TABLE>

"Pre-Clinical" refers to the series of tests in the laboratory and those
performed on animals after a lead molecule has been identified. Basic
pharmacology is completed in this phase as well as the toxicology required for
human testing, which may be ongoing. Primary and secondary manufacturing of the
active compound and the method of drug delivery (intravenous or tablet, for
example) will be established during this time. Testing in humans is expected to
begin within 18 and 24 months. Pre-clinical tests must be completed before an
Investigational New Drug application ("IND") can be submitted to the FDA.

"IND" refers to the preparation of an Investigational New Drug application, the
process by which a drug is submitted to the FDA to receive approval for human
testing.


                                       14
<PAGE>

"Phase I" refers to the stage in which compounds are tested for safety, maximal
tolerated dose and pharmacokinetics in volunteers without the disease.

"Phase II" refers to the initial stages of compound testing in patients with the
disease (a particular indication) or symptoms of interest for ultimate New Drug
Application ("NDA") approval and labeling. This stage first demonstrates the
compound's efficacy and dosing range, and expands the safety profile.

"Phase III" refers to the rigorously controlled test of a new drug in a large
population of patients with the disease. After the successful conclusion of
Phase III clinical trials, an NDA is filed with the FDA for approval to market
the drug.

INNOVATE PRODUCTS IN DEVELOPMENT: CLINICAL CANDIDATES

INOC-001 Chemo-resistance Inhibitor

Description. INOC-001 is the lead drug candidate in our portfolio. Our
management believes that the compound offers a novel approach to overcoming
resistance to chemotherapy that many patients develop over the course of
treatment. The compound, which is marketed as an anti-viral drug in Germany and
other European countries, is being tested to treat metastatic pancreatic cancer.
In pre-clinical studies, INOC-001 demonstrated an ability to reduce toxic side
effects, slow disease progression and increase survival rates when used in
conjunction with some chemotherapeutic drugs. Pre-clinical experiments have
shown evidence of INOC-00l inhibiting several genes responsible for
chemo-resistance as well as using multiple mechanisms of action. We have
completed a Phase I trial with various types of solid tumors and chemotherapy
regimens and have documented early efficacy in patients with pancreatic cancer.

Market Opportunity. The American Cancer Society estimated that in 2005, 32,180
people in the U.S. would be diagnosed with pancreatic cancer and 31,800 patients
would die from the disease. The five-year survival rate is only 4.4%, making it
one of the most lethal forms of cancer. Fewer than 10% of patients respond to
treatment.

Partnerships. The Company is developing this compound with Avantogen through a
joint venture partnership in Resistys, Inc. Bioaccelerate formed a joint venture
partnership in Resistys with Avantogen in September 2004. On January 17, 2005,
Bioaccelerate assigned 100% of its shares in Resistys to Bioaccelerate's wholly
owned subsidiary Cynat. In partial fulfillment of its its agreement to provide
clinical products to Innovate, Bioaccelerate transferred 100% of the capital
stock of Cynat and thus its 50% stake in Resistys to Innovate on March 16, 2005.
The transfer followed an announcement on February 14, 2005 that Bioaccelerate
would assign its rights to develop and commercialize INOC-001 to Innovate. The
Company is sharing the development costs equally with its partner as well as an
exclusive license to market the product in the U.S. and Canada. If the Share
Exchange Agreement among Avantogen, Bioaccelerate and the Company is consummated
this Spring, as planned, the Company will own 100% of Resistys.

Status.

The Company has been conducting an extended Phase I/II trial in Germany and a
third and final Phase I study is underway to test dose-escalation in 21 patients
with metastatic pancreatic cancer. Thus far, the compound has demonstrated
notable survival benefits. For the treatment group of patients with advanced
pancreatic cancer, the 50% probability of survival increased to an average of 15
months from an historic average of 7.5 months.

The Company is designing a Phase II study in the U.S. and preparing an IND to
file with the FDA. We anticipate the FDA will approve the application based on
the current data from the German trials. Also, we plan to submit a letter to the
FDA requesting orphan status for the drug. Under the Orphan Drug Act, the FDA
may grant orphan drug designation to drugs intended to treat a rare disease or
condition, generally defined as one that affects populations of fewer than
200,000 people in the U.S. Patents. A U.S. patent, number 6,589,941 was granted
for the compound in 2003 and another U.S. patent is pending. A patent was issued
under the terms of the Patent Cooperative Treaty ("PCT"), which is adhered to by
more than 100 countries.


                                       15
<PAGE>

INOC-005 Capridine Beta

Description. INOC-005 is a new chemical entity ("NCE") to treat prostate cancer.
The compound renders aggressive hormone-independent prostate cells
hormone-sensitive, and therefore may be effective in treating both
hormone-sensitive and hormone-insensitive tumors in combination with
anti-androgen therapy. In pre-clinical development, INOC-005 also showed
activity against leukemia, melanoma, lung, colon, ovarian, renal and bladder
cancer. Toxicology studies indicate that this compound may have lower bone
marrow toxicity than some drugs currently used to treat these conditions.

Market Opportunity. In 2003, approximately 300,000 men in the seven major market
countries (U.S., France, Germany, Italy, Spain, Japan and the UK) were diagnosed
with prostate cancer; the total patient population was 1,774,000, according to
Reuters Business Insight. Those patients had a 99.7% one-year survival rate and
a 96.8% five-year survival rate. Treatment for prostate cancer is one of the
success stories in oncology research. Nonetheless there's room for improvement
given the prevalence of the disease.

Partnerships. On March 31, 2005, the Company entered into an agreement with
Prostagenics, LLC pursuant to which Innovate obtained the global patent rights
to develop and commercialize INOC-005.

Status. Pre-clinical efficacy testing has been completed. The Company expects to
file an IND application with the FDA in 2006 to conduct Phase I clinical trials
for advanced prostate cancer.

Patents. A U.S. patent, number 6,589,961 was granted to this product candidate
in 2003. Seven other patent applications have been filed for this compound in
the U.S., Canada, Mexico, Europe and Israel.

INOC-009 Oral Paclitaxal

Description. INOC-009 is a reformulation of a commonly used intravenous
chemotherapeutic agent that treats several types of cancer, including breast,
ovarian and AIDS-related Kaposi's sarcoma. This new oral formulation improves
the drug's solubility and therefore facilitates absorption into the bloodstream.
The formulation also prevents efflux of the drug from the intestine.

Market Opportunity. Breast cancer is the second most common form of cancer
worldwide, according to the World Health Organization's World Cancer Report. An
existing intravenous paclitaxal product (Taxol(R)) was one of the top 10 selling
cancer drugs in 2004 with sales of more than $1.2 billion.

Partnerships. On July 15, 2004, Bioaccelerate entered into a license and
co-marketing agreement with Supratek Pharma, Inc. to develop INOC-009 to treat
cancer in humans. Innovate is already a licensee under the terms of the
agreement, but Bioaccelerate has also assigned its rights under this agreement
to Innovate on March 16, 2005, subject to receipt of Supratek's written consent,
which can not be unreasonably withheld.

Status.

Pre-clinical testing has been completed. The Company expects to file an IND
application with the FDA upon the completion of toxicology studies in 2006.

Patents. Supratek owns a total of four "composition of matter" patents, numbers
5,817,321, 6,060,518, 6,277,410 and 6,387,406, in the U.S. related to its
proprietary technology and is responsible for maintenance and upkeep of its
patents

COMPANY STATUS

The Company continues to make significant progress in developing its product
portfolio, and has multiple products in clinical trials with other compounds
following on in development. We have continued to incur losses as expected
during this emerging stage. We anticipate that the success of our immediate
product development strategy will permit us to further develop our other
products and potential products currently in our portfolio.


                                       16
<PAGE>

A major element of the Company's product development strategy has been the use
of third-party or contract research organizations ("CROs") to assist in the
conduct of safety and efficacy testing and clinical studies, to assist the
Company in guiding products through the FDA and EMEA regulatory review and
approval processes, and to manufacture and distribute any FDA and EMEA approved
products. The Company believes that maintaining a limited infrastructure will
enable it to develop products efficiently and cost effectively. However
consideration will be given to opportunities to strengthen the resources and
portfolio in certain areas that may prove viable commercially and add value to
the overall business in the future.


                                       17
<PAGE>

The reader should consider the likelihood of our future success to be highly
speculative in light of our limited operating history, as well as the limited
resources, problems, expenses, risks and complications frequently encountered by
similarly situated companies. To address these risks, we must, among other
things:

      o     advance our lead product candidates and technology platforms;

      o     obtain required government and other public and private approvals on
            a timely basis; o enter into corporate partnerships;

      o     license additional technology;

      o     maintain a proprietary position in our technologies and products;
            and

      o     attract and retain key personnel.

The Company may not be successful in addressing these risks. If we are unable to
do so, our business prospects, financial condition and results of operations
would be materially adversely affected. The likelihood of our success must be
considered in light of the development cycles of pharmaceutical and
biopharmaceutical products and technologies and the competitive and regulatory
environment in which we operate.

Results of Operations - Comparison of quarter ended March 31, 2006 and 2005

During the quarter ended March 31, 2006, work continued on the product
development programs as planned and the individual expense items are detailed
below.

General and administrative expenses amounted to $361,340 for the quarter ended
March 31, 2006 compared with $1,437,347 for the quarter ended March 31, 2005.
The lower costs in 2006 were primarily due to the initial consulting fees
relating to the setting up of new research projects and expenses incurred at the
beginning of 2005.

Research and development expenses for the quarter ended March 31, 2006 were
$571,179 compared with $284,370 during the quarter ended March 31, 2005. These
were due to the continuing development expenses in the Resistys project.

Net loss for the quarter ended March 31, 2006 was $982,349 compared with
$1,721,717 for the quarter ended March 31, 2005. This decrease was due to the
higher general and administrative expenses which were incurred at the beginning
of 2005 when the company was gearing up for research and development work.

The Company has incurred a net loss of $7,116,892 since inception.


                                       18
<PAGE>

Liquidity and Capital Resources

A $5million credit facility was agreed with Bioaccelerate on July 22, 2004. The
Company is using these funds to develop its lead products. This investment has
enabled the Company to progress its milestones for its lead development
programs. We believe this facility will be sufficient to support our business
plan until longer term financing can be arranged.

Should encounter any unforeseen problems, the Company will review its budget and
adjust the scheduling and costs of the development programs accordingly to allow
the Company to operate until sufficient long term funding is achieved. However,
a key element of our business strategy is to continue to acquire, obtain
licenses for, and develop, new technologies and products that we believe offer
unique market opportunities and/or complement our existing product lines.

ITEM 3 - CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's President and the Company's Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended) to ensure that
information required to be disclosed by us in the reports filed or submitted by
us under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Securities and Exchange Commission's
rules and forms. This process includes ensuring information required to be
disclosed by us in the reports filed or submitted by us under the Exchange Act
is accumulated and communicated to our management, our principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that as of March 31, 2006, our disclosure controls and procedures were
not effective at the reasonable assurance level due to the material weaknesses
described below.

o     In light of the material weaknesses described below, we performed
      additional analyses and other post-closing procedures to ensure our
      consolidated financial statements were prepared in accordance with
      generally accepted accounting principles. Accordingly, we believe that the
      consolidated financial statements included in this report fairly present,
      in all material respects, our financial condition, results of operations
      and cash flows for the periods presented.

o     A material weakness is a control deficiency (within the meaning of the
      Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2)
      or combination of control deficiencies, that results in more than a remote
      likelihood that a material misstatement of the annual or interim financial
      statements will not be prevented or detected. Management has identified
      the following three material weaknesses which have caused management to
      conclude that, as of March 31, 2006, our disclosure controls and
      procedures were not effective at the reasonable assurance level :

      1.    We do not have complete written documentation of our internal
            control policies and procedures. Written documentation of key
            internal controls over financial reporting is a requirement of
            Section 404 of the Sarbanes-Oxley Act and will be applicable to us
            for the year ending December 31, 2007. Management evaluated the
            impact of our failure to have written documentation of our internal
            controls and procedures on our assessment of our disclosure controls
            and procedures and has concluded that the control deficiency that
            resulted represented a material weakness.

      2.    We do not have sufficient segregation of duties within accounting
            functions, which is a basic internal control. Due to our size and
            nature, segregation of all conflicting duties may not always be
            possible and may not be economically feasible. However, to the
            extent possible, the initiation of transactions, the custody of
            assets and the recording of transactions should be performed by
            separate individuals. Management evaluated the impact of our failure
            to have segregation of duties on our assessment of our disclosure
            controls and procedures and has concluded that the control
            deficiency that resulted represented a material weakness.


                                       19
<PAGE>

      3.    We had a significant number of audit adjustments last fiscal year.
            Audit adjustments are the result of a failure of the internal
            controls to prevent or detect misstatements of accounting
            information. The failure could be due to inadequate design of the
            internal controls or to a misapplication or override of controls.
            Management evaluated the impact of our significant number of audit
            adjustments last year and has concluded that the control deficiency
            that resulted represented a material weakness.

            To address these material weaknesses, management performed
            additional analyses and other procedures to ensure that the
            financial statements included herein fairly present, in all material
            respects, our financial position, results of operations and cash
            flows for the periods presented.

Remediation of Material Weaknesses

To remediate the material weaknesses in our disclosure controls and procedures
identified above, in addition to working with our independent auditors, we are
continuing the process of completely documenting on internal control policies
and procedures, and we continue to refine our internal procedures to begin to
implement segregation of duties and to reduce the number of audit adjustments.

Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over
financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act, during our most recently completed fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims arising
out of our operations in the normal course of business. We currently are not a
party to any legal proceedings, the adverse outcome of which, in management's
opinion, individually or in the aggregate, would have a material adverse effect
on our results of operations or financial position.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 - OTHER INFORMATION

None


                                       20
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8

(a) Exhibits. The following exhibits are filed with this report.

      31.   Written Statement of President and Chief Financial Officer with
            respect to compliance with Section 13(a) or 15 (d) of the Securities
            Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of
            2002.

      32.   Written Statement of President and Chief Financial Officer with
            respect to compliance with Section 13(a) or 15(d) of the Securities
            Exchange Act of 1934 and pursuant to 18 U.S.C. 1350, as adopted
            pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002.

(b)   Reports on Form 8-K. The following reports have been filed on Form 8-K
      during the last fiscal quarter:

      None

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned authorized officers.

Dated: May 15, 2006

Innovate Oncology, Inc.


By: /s/ Linden Boyne
------------------------------------
Linden Boyne
CEO & Director
(Chief Executive Officer)


By: /s/ Alan Bowen
------------------------------------
Alan Bowen
CFO, Treasurer & Director
(Chief Financial Officer)


                                       21