---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2007

[   ]TRANSITION REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934For the transition period from ______________________ To ______________________

Commission file number 333-135946

HEMIS CORPORATION(Exact name of registrant as specified in its charter)

|Nevada                                           | 20-2749916                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     

Bettlistrasse 358600 Dübendorf,
Switzerland(Address of principal executive offices)

(702) 387 2382(Registrants
telephone number, including area code)

______________________________________________________(Former
name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
  for such shorter period that the registrant was require to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. [X]
  Yes   [   ] No

Indicate by check mark whether the registrant is a shell company
  (as defined in Rule 12b-2 of the Exchange Act).
  [   ] Yes   [X] No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
  DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has filed all documents and reports
  required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange
  Act of 1934 subsequent to the distribution of securities under a plan confirmed
  by a court. [   ] Yes   [   ] No

APPLICABLE ONLY TO CORPORATE ISSUERS

As of August 14, 2007, the registrants outstanding common
  stock consisted of 72,263,816shares.

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Table of Contents

|PART I FINANCIAL INFORMATION | 2                                                                                  
|----------------------------- | -----------------------------------------------------------------------------------
|ITEM 1.                       | FINANCIAL STATEMENTS                                                               
|ITEM 2.                       | MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION/
      PLAN OF OPERATIONS
|ITEM 3.                       | CONTROL AND PROCEDURES                                                             
|PART II OTHER INFORMATION    | 13                                                                                 
|ITEM 1.                       | LEGAL PROCEEDINGS                                                                  
|ITEM 2.                       | UNREGISTERED SALES OF EQUITY SECURITIES                                            
|ITEM 3.                       | DEFAULTS UPON SENIOR SECURITIES                                                    
|ITEM 4.                       | SUBMISSION OF MATTERS TO A VOTE SECURITY HOLDERS                                   
|ITEM 5.                       | OTHER INFORMATION                                                                  
|ITEM 6.                       | EXHIBITS                                                                           

1

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PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The unaudited interim consolidated financial statements of
Hemis Corporation (the Company, Hemis, we, our, us) follow. All
currency references in this report are in US dollars unless otherwise noted.

Hemis CorporationJune 30, 2007 (unaudited)

|Index to Financial Statements                                                                                                                                                                                  | Page             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|                                                                                                                                                                                                               |                  
|Condensed
      Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006                                                                                                                          | F-2              
|                                                                                                                                                                                                               |                  
|Condensed
      Consolidated Statements of Losses for the three and six months ended June
      30, 2007 and June 30,2006, and for the period from February 9, 2005 (date
      of inception) to June 30, 2007 | F-3              
|                                                                                                                                                                                                               |                  
|Condensed
      Consolidated Statements of (Deficiency in) Stockholders' Equity for the
      period from February 9, 2005 (date of inception) to June 30, 2007                                                | F-4
      ~ F-12 
|                                                                                                                                                                                                               |                  
|Condensed
      Consolidated Statements of Cash Flows for the six months ended June 30,
      2007 and June 30,2006 , and for the period from February 9, 2005 (date of
      inception) to June 30, 2007      | F-13
      ~ F-14
|                                                                                                                                                                                                               |                  
|Notes
      to Unaudited Condensed Consolidated Financial Statements                                                                                                                                           | F-15
      ~ F-32

2

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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FINANCIAL STATEMENTS

(June 30, 2007)

HEMIS CORPORATION(An exploration stage company)(unaudited)





F-1

---

HEMIS CORPORATION. (An exploration stage company)
CONDENSED CONSOLIDATED BALANCE SHEETSJUNE 30, 2007

|                                                                          |   | (Unaudited) |   |   |               |  
|------------------------------------------------------------------------- | - | ----------- | - | - | ------------- | -
|                                                                          |   | June 30,    |   |   | December      |  
|                                                                          |   | 2007        |   |   | 2006          |  
|ASSETS                                                                    |   |             |   |   |               |  
|CURRENT ASSETS:                                                           |   |             |   |   |               |  
|Cash and cash equivalents                                                 | $ | 274,054     |   | $ | 2,437,981     |  
|Cash held in trust (Note A)                                               |   | -           |   |   | 23,468        |  
|Advances to related party ( Note F)                                       |   | -           |   |   | 95,000        |  
|Prepaid expenses and other current assets                                 |   | 289,585     |   |   | 179,847       |  
|Total current assets                                                      |   | 563,639     |   |   | 2,736,296     |  
|Property and equipment, at cost:                                          |   |             |   |   |               |  
|Furniture and equipment                                                   |   | 136,697     |   |   | 70,460        |  
|Less: accumulated depreciation                                            |   | (17,258     | ) |   | (
      8,038 | )
|Total property and equipment, net                                         |   | 119,439     |   |   | 62,422        |  
|                                                                          |   |             |   |   |               |  
|Net assets of discontinued operations (Note
      F)                      |   | -           |   |   | 16,275        |  
|                                                                          |   |             |   |   |               |  
|Total assets                                                              | $ | 683,078     |   | $ | 2,814,993     |  
|                                                                          |   |             |   |   |               |  
|LIABILITIES AND (DEFICIENCY IN)
      STOCKHOLDERS'                       |   |             |   |   |               |  
|CURRENT LIABILITIES:                                                      |   |             |   |   |               |  
|Accounts payable and accrued liabilities                                  | $ | 454,687     |   | $ | 266,782       |  
|Other payables                                                            |   | 50,000      |   |   | -             |  
|Advances from related party ( Note F)                                     |   | 1,150,601   |   |   | -             |  
|Put liability (Note D)                                                    |   | -           |   |   | 636,168       |  
|Total current liabilities                                                 |   | 1,655,288   |   |   | 902,950       |  
|Net liability of discontinued operations(Note F)                          |   | 8,637       |   |   | 15,444        |  
|COMMITMENTS AND CONTINGENCIES (Note E)                                    |   | -           |   |   | -             |  
|(DEFICIENCY IN) STOCKHOLDERS' EQUITY                                      |   |             |   |   |               |  
|Common stock, par value $.001 per share;
      150,000,000 shares         |   |             |   |   |               |  
|authorized at June 30, 2007 and December 31, 2006;                        |   |             |   |   |               |  
|71,373,816 and 20,309,373 shares issued and
      outstanding at June 30, |   |             |   |   |               |  
|and December 31, 2006, respectively (Note B)                              |   | 71,372      |   |   | 20,309        |  
|Deferred compensation expenses (Note B and
      C)                       |   | (10,771,749 | ) |   | (3,666,667    | )
|Additional paid-in capital                                                |   | 25,169,979  |   |   | 12,282,458    |  
|Common stock subscription payable (Note B)                                |   | 237,001     |   |   | 1,330,938     |  
|Common stock subscription receivable (Note B)                             |   | (3,300      | ) |   | (3,300        | )
|Accumulated deficit during exploration
      stage                        |   | (15,672,309 | ) |   | (8,065,942    | )
|Accumulated other comprehensive loss:                                     |   |             |   |   |               |  
|Foreign currency translation adjustment                                   |   | ( 11,841    | ) |   | (1,197        | )
|(Deficiency in) Stockholders' equity                                      |   | (980,847    | ) |   | 1,896,599     |  
|Total liabilities and (deficiency in)
      stockholders' equity          | $ | 683,078     |   | $ | 2,814,993     |  

See accompanying notes to unaudited condensed consolidated
financial statements. F-2

---

HEMIS CORPORATION. (An exploration stage
company)CONDENSED CONSOLIDATED STATEMENTS OF LOSSES AND COMPREHENSIVE
LOSSES (Unaudited)

**For the
period**For the
    
    
    For the
    
    
    For the six
    
    
    For the six
    
    
    February 9,Months
    
    
    Months
    
    
    Months
    
    
    Months
    
    
    (date ofJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    through June2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007Costs and Expenses:General and Administrative
    $
    4,495,094
    
    $
    800,008
    
    $
    7,566,890
    
    $
    2,034,015
    
    $
    15,373,726Depreciation
    
    5,477
    
    
    12,111
    
    
    9,220
    
    
    12,788
    
    
    16,645Total Operating Expense
    
    4,500,571
    
    
    812,119
    
    
    7,576,110
    
    
    2,046,803
    
    
    15,390,371Loss from Operations
    
    (4,500,571
    )
    
    ( 812,119
    )
    
    (7,576,110
    )
    
    (2,046,803
    )
    
    (15,390,371
    )Other income (expenses):Loss on put agreement (Note
    
    -
    
    
    -
    
    
    (20,789
    )
    
    -
    
    
    (141,105
    )Loss from continuingtaxes and discontinued
    
    (4,500,571
    )
    
    ( 812,119
    )
    
    (7,596,899
    )
    
    (2,046,803
    )
    
    (15,531,476
    )Provision for Income Tax
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Loss from continuingdiscontinued operations
    
    (4,500,571
    )
    
    ( 812,119
    )
    
    (7,596,899
    )
    
    (2,046,803
    )
    
    (15,531,476
    )Loss from discontinued
    
    -
    
    
    (22,128
    )
    
    (4,748
    )
    
    (22,128
    )
    
    (108,218
    )Loss on disposal of
    
    -
    
    
    -
    
    
    (4,720
    )
    
    -
    
    
    (32,615
    )Net Loss
    $
    (4,500,571
    )
    $
    ( 834,247
    )
    $
    (7,606,367
    )$
    $
    (2,068,931$
    
    
    (15,672,309
    )Other Comprehensive LossesLoss on foreign currency
    
    (11,101
    )
    
    -
    
    
    (10,644
    )
    
    -
    
    
    (11,841
    )Total Comprehensive Loss
    $
    (4,511,672
    )
    $
    ( 834,247
    )
    $
    (7,617,011
    )
    $
    (2,068,931$
    
    
    (15,684,150
    )Loss per common share (basic
    $
    (0.06
    )
    $
    (0.07
    )
    $
    (0.12
    )
    $
    (0.17
    )Continuing operations
    $
    (0.06
    )
    $
    (0.07
    )
    $
    (0.12
    )
    $
    (0.17
    )Discontinued operations
    $
    (0.00
    )
    $
    (0.00
    )
    $
    (0.12
    )
    $
    (0.17
    )Weighted average commonfor computation
    
    70,753,576
    
    
    12,681,489
    
    
    64,224,378
    
    
    12,028,587


See accompanying notes to unaudited condensed consolidated
financial statements. F-3

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION) THROUGH JUNE 30,
2007 (Unaudited)

|                              |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   | Deficit     |   |   |            |  
|----------------------------- | ---------- |  | - | ------ |  | - | ---------- |  | - | ------------ |  | - | ------------ | - | - | ----------- | - | - | ---------- | -
|                              |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   | Accumulated |   |   |            |  
|                              |            |  |   |        |  |   | Additional |  |   | Common       |  |   | Deferred     |   |   | During      |   |   |            |  
|                              | Common     |  |   | Stock  |  |   | Paid in    |  |   | Stock        |  |   | Compensation |   |   | Exploration |   |   |            |  
|                              | Shares     |  |   | Amount |  |   | Capital    |  |   | Subscription |  |   | Expense      |   |   | Stage       |   |   | Total      |  
|Issuance of common stock to   |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|founders in May 2005 at       |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|$0.001 per share              | 10,000,000 |  | $ | 10,000 |  |   | -          |  | $ | -            |  | $ | -            |   | $ | -           |   | $ | 10,000     |  
|Issuance of stock options to  |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|founders in May 2005 in       |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|exchange for deferred         | -          |  |   | -      |  |   | 5,500,000  |  |   | -            |  |   | (5,500,000   | ) |   | -           |   |   | -          |  
|compensation (Note C)         |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|Shares issued in May 2005     |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|pursuant to private           |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|placement at $.55 per share   | 30,000     |  |   | 30     |  |   | 16,470     |  |   | -            |  |   | -            |   |   | -           |   |   | 16,500     |  
|Shares issued in July 2005 in |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|exchange for services at      |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|$.55 per share                | 100,000    |  |   | 100    |  |   | 54,900     |  |   | -            |  |   | -            |   |   | -           |   |   | 55,000     |  
|Shares issued in July 2005    |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|pursuant to private           |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|placement at $.55 per share   | 500        |  |   | 1      |  |   | 274        |  |   | -            |  |   | -            |   |   | -           |   |   | 275        |  
|Shares issued in August       |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|2005 pursuant to private      |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|placement at $.55 per share,  | 458,183    |  |   | 458    |  |   | 226,342    |  |   | -            |  |   | -            |   |   | -           |   |   | 226,800    |  
|net of costs and fees         |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|Shares issued in September    |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|2005 in exchange for          |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|services at $.55 per share    | 100,000    |  |   | 100    |  |   | 54,900     |  |   | -            |  |   | -            |   |   | -           |   |   | 55,000     |  
|Common stock subscribed       | -          |  |   | -      |  |   | -          |  |   | 430,625      |  |   | -            |   |   | -           |   |   | 430,625    |  
|Amortization of deferred      | -          |  |   | -      |  |   | -          |  |   | -            |  |   | 733,333      |   |   | -           |   |   | 733,333    |  
|compensation (Note C)         |            |  |   |        |  |   |            |  |   |              |  |   |              |   |   |             |   |   |            |  
|Net loss                      | -          |  |   | -      |  |   | -          |  |   | -            |  |   | -            |   |   | (1,237,203  | ) |   | (1,237,203 | )
|Balance at December 31, 2005  | 10,688,683 |  | $ | 10,689 |  | $ | 5,852,886  |  | $ | 430,625      |  | $ | (4,766,667   | ) | $ | (1,237,203  | ) | $ | 290,330    |  

See accompanying notes to unaudited condensed consolidated
financial statements. F-4

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HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|                                                     |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   | Deficit     |   |   |         | 
|---------------------------------------------------- | ---------- |  | - | ------ |  | - | ---------- |  | - | ------------ | - | - | ------------ |  | - | ----------- |  | - | ------------ | - | - | ----------- | - | - | ------- | 
|                                                     |            |  |   |        |  |   |            |  |   | Common       |   |   | Common       |  |   | Foreign     |  |   |              |   |   | Accumulated |   |   |         | 
|                                                     |            |  |   |        |  |   | Additional |  |   | Stock        |   |   | Stock        |  |   | Currency    |  |   |              |   |   | During      |   |   |         | 
|                                                     | Common     |  |   | Stock  |  |   | Paid in    |  |   | Subscription |   |   | Subscription |  |   | Translation |  |   | Deferred     |   |   | Exploration |   |   |         | 
|                                                     | Shares     |  |   | Amount |  |   | Capital    |  |   | Payable      |   |   | Receivable   |  |   | Adjustments |  |   | Compensation |   |   | Stage       |   |   | Total   | 
|                                                     |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|Balance forward                                      | 10,688,683 |  | $ | 10,689 |  | $ | 5,852,886  |  | $ | 430,625      |   | $ | -            |  | $ | -           |  | $ | (4,766,667   | ) | $ | (1,237,203  | ) | $ | 290,330 | 
|Shares issued in January 2006 for common stock       |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|subscribed in December 2005                          | 593,638    |  |   | 594    |  |   | 325,906    |  |   | (326,500     | ) |   | -            |  |   | -           |  |   | -            |   |   | -           |   |   | -       | 
|Shares issued in February 2006 in exchange for       |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|common stock subscribed in December 2005 and         |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|pursuant to private placement at $.55 per share, net |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|of costs and fees                                    | 274,795    |  |   | 275    |  |   | 140,862    |  |   | (93,125      | ) |   | -            |  |   | -           |  |   | -            |   |   | -           |   |   | 48,012  | 
|Shares issued in March 2006 in exchange for          |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|common stock subscribed in December 2005 and         |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|pursuant to private placement at $.55 per share, net |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|of costs and fees                                    | 164,337    |  |   | 163    |  |   | 79,386     |  |   | (11,000      | ) |   | -            |  |   | -           |  |   | -            |   |   | -           |   |   | 68,549  | 
|Issuance of stock options in January 2006 in         |            |  |   |        |  |   |            |  |   |              |   |   |              |  |   |             |  |   |              |   |   |             |   |   |         | 
|exchange for consulting services (Note C)            | -          |  |   | -      |  |   | 26,845     |  |   | -            |   |   | -            |  |   | -           |  |   | -            |   |   | -           |   |   | 26,845  | 

See accompanying notes to unaudited condensed consolidated
financial statements. F-5

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

Shares issued in May 2006 pursuant to privateplacement at $.55 per share, net of costs
        and fees
      480,000
      
      
      480
      
      
      243,445
      
      
      -
      
      
      (3,300
      )
      
      -
      
      
      -
      
      
      -
      
      
      240,625Shares issued in May 2006 pursuant to privateplacement at $.75 per share, net of costs
        and fees
      25,000
      
      
      25
      
      
      16,850
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      16,875Shares issued in May 2006 in exchange for servicesat approximately $.55 per share
      1,070,880
      
      
      1,071
      
      
      587,913
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      588,984Shares issued in placement at
      308,772
      
      
      309
      
      
      164,016
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      164,325$.55 per share, net of costs and feesShares issued in June 2006 pursuant to privateplacement at $.75 per share, net of costs
        and fees
      150,000
      
      
      150
      
      
      102,229
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      102,379Shares issued in June 2006 in exchange for servicesat approximately $.55 per share
      50,000
      
      
      50
      
      
      27,450
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      27,500Shares issued in June 2006 in exchange for servicesat approximately $.75 per share
      125,000
      
      
      125
      
      
      93,625
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      93,750Shares issued in August 2006 pursuant to privateplacement at $.75,net of costs and fees
      1,033,730
      
      
      1,034
      
      
      699,820
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      700,854


See accompanying notes to unaudited condensed consolidated
financial statements. F-6

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|Shares issued in August 2006 in exchange for services    |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|-------------------------------------------------------- | --------- |  |  | ----- |  |  | --------- |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | --------- | 
|at approximately $.75 per share                          | 5,000     |  |  | 5     |  |  | 3,745     |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 3,750     | 
|Shares issued in September 2006 pursuant to private      |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|placement at $.75,net of costs and fees                  | 961,428   |  |  | 961   |  |  | 624,089   |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 625,050   | 
|Shares issued in October 2006 pursuant to private        |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|placement at $.75,net of costs and fees                  | 244,000   |  |  | 244   |  |  | 167,531   |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 167,775   | 
|Shares issued in October 2006 in exchange for services   |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|at $.75 per share                                        | 1,500,000 |  |  | 1,500 |  |  | 1,123,500 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,125,000 | 
|Shares issued in October 2006 in exchange for            |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|exploration expenditures at $.75 per share               | 25,000    |  |  | 25    |  |  | 18,725    |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 18,750    | 
|Shares issued in October 2006 pursuant to private        |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|placement at $.95,net of costs and fees                  | 357,420   |  |  | 357   |  |  | 311,963   |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 312,320   | 
|Shares issued in October 2006 in exchange for            |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|Exploration expenditures at $.95 per share               | 25,000    |  |  | 25    |  |  | 23,725    |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 23,750    | 
|Shares issued in November 2006 pursuant to private       |           |  |  |       |  |  |           |  |  |   |  |  |   |  |  |   |  |  |   |  |  |   |  |  |           | 
|placement at $.75 per share, net of costs
      and fees | 52,614    |  |  | 53    |  |  | 31,907    |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 31,960    | 

See accompanying notes to unaudited condensed consolidated
financial statements. F-7

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|Shares issued in November 2006 pursuant to
      private           |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|------------------------------------------------------------------ | ---------- |  | - | ------ |  | - | ---------- | - | - | --------- |  | - | ------ | - | - | ------ | - | - | ---------- | - | - | ---------- | - | - | ---------- | -
|placement at $.95, net of costs and fees                           | 295,528    |  |   | 296    |  |   | 260,312    |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 260,608    |  
|Shares issued in November 2006 in exchange
      for services      |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|at approximately $.95 per share                                    | 1,310,180  |  |   | 1,310  |  |   | 1,242,935  |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 1,244,245  |  
|Shares issued in December 2006 pursuant to
      private           |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|placement at $.95,net of costs and fees                            | 15,789     |  |   | 16     |  |   | 13,484     |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 13,500     |  
|Shares issued in December 2006 pursuant to
      private           |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|placement at $1.20,net of costs and fees                           | 549,150    |  |   | 549    |  |   | 611,051    |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 611,600    |  
|Shares issued in December 2006 in exchange
      for               |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|services at $1.20 per share                                        | 3,429      |  |   | 3      |  |   | 4,111      |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 4,114      |  
|Reclassification of equity to liability upon
      issuance of put | -          |  |   | -      |  |   | (515,852   | ) |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | ( 515,852  | )
|Common stock subscribed                                            | -          |  |   | -      |  |   | -          |   |   | 1,330,938 |  |   | -      |   |   | -      |   |   | -          |   |   | -          |   |   | 1,330,938  |  
|Amortization of deferred compensation (Note
      C)               | -          |  |   | -      |  |   | -          |   |   | -         |  |   | -      |   |   | -      |   |   | 1,100,000  |   |   | -          |   |   | 1,100,000  |  
|Net loss                                                           | -          |  |   | -      |  |   | -          |   |   | -         |  |   | -      |   |   | -      |   |   | -          |   |   | (6,828,739 | ) |   | (6,828,739 | )
|Other Comprehensive loss:                                          |            |  |   |        |  |   |            |   |   |           |  |   |        |   |   |        |   |   |            |   |   |            |   |   |            |  
|Foreign exchange translation loss                                  | -          |  |   | -      |  |   | -          |   |   | -         |  |   | -      |   |   | (1,197 | ) |   | -          |   |   | -          |   |   | ( 1,197    | )
|Balance at December 31, 2006                                       | 20,309,373 |  | $ | 20,309 |  | $ | 12,282,459 |   | $ | 1,330,938 |  | $ | (3,300 | ) | $ | (1,197 | ) | $ | (3,666,667 | ) | $ | (8,065,942 | ) | $ | 1,896,599  |  

See accompanying notes to unaudited condensed consolidated
financial statements. F-8

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|                                                             |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   | Deficit     |   |   |           |  
|------------------------------------------------------------ | ---------- |  |  | ---------- |  |  | ---------- | - |  | ------------ | - |  | ------------ | - |  | ------------ | - |  | ---------- | - | - | ----------- | - | - | --------- | -
|                                                             |            |  |  |            |  |  |            |   |  | Common       |   |  | Common       |   |  | Foreign      |   |  |            |   |   | Accumulated |   |   |           |  
|                                                             |            |  |  |            |  |  |            |   |  | Stock        |   |  | Stock        |   |  | Currency     |   |  |            |   |   | During      |   |   |           |  
|                                                             |            |  |  |            |  |  | Additional |   |  | Subscription |   |  | Subscription |   |  | Translation  |   |  | Deferred   |   |   | Exploration |   |   |           |  
|                                                             | Common     |  |  | Paid       |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |  
|                                                             | Stock      |  |  | in Capital |  |  | Payable    |   |  | Receivable   |   |  | Adjustments  |   |  | Compensation |   |  | Stage      |   |   | Total       |  
|                                                             | Shares     |  |  | Amount     |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|Balance at December 31, 2006                                 | 20,309,373 |  |  | 20,309     |  |  | 12,282,459 |   |  | 1,330,938    |   |  | (3,300       | ) |  | (1,197       | ) |  | (3,666,667 | ) | $ | (8,065,942  | ) | $ | 1,896,599 |  
|                                                             |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|Shares issued in January 2007 for common stock               |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|subscribed in December 2006                                  | 1,154,862  |  |  | 1,155      |  |  | 1,325,619  |   |  | (1,326,774   | ) |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | -         |  
|Shares issued in January 2007 for commission
      in        |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|connection with common stock subscribed in December 2006     | 4,100      |  |  | 4          |  |  | (4         | ) |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | -         |  
|Commission paid in connection with common                    |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|stock subscribed in December 2006                            | -          |  |  | -          |  |  | (33,582    | ) |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | (33,582   | )
|Shares issued in January 2007 pursuant to
      private      |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|placement at $1.20 per share, net of costs and fees          | 115,091    |  |  | 115        |  |  | 107,885    |   |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | 108,000   |  
|Shares issued in January 2007 pursuant to
      exercise of  |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|stock options at $.001 per share                             | 10,000,000 |  |  | 10,000     |  |  | -          |   |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | 10,000    |  
|Shares issued in January 2007 in exchange
      for services |            |  |  |            |  |  |            |   |  |              |   |  |              |   |  |              |   |  |            |   |   |             |   |   |           |  
|at approximately $1.20 per share                             | 42,500     |  |  | 43         |  |  | 50,957     |   |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | 51,000    |  
|Stock dividend issued in January 2007                        | 31,625,926 |  |  | 31,625     |  |  | (31,625    | ) |  | -            |   |  | -            |   |  | -            |   |  | -          |   |   | -           |   |   | -         |  

See accompanying notes to unaudited condensed consolidated
financial statements. F-9

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|Shares issued in January 2007 for common stock                     |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|------------------------------------------------------------------ | --------- |  |  | ----- |  |  | --------- | - |  | ------ | - |  | - |  |  | - |  |  | ---------- | - |  | - |  |  | --------- | 
|subscribed in December 2006                                        | 3,470     |  |  | 3     |  |  | 4,161     |   |  | (4,164 | ) |  | - |  |  | - |  |  | -          |   |  | - |  |  | -         | 
|Issuance of stock options in January 2007 in                       |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  | - |  |  |            |   |  |   |  |  |           | 
|exchange for consulting services (Note C)                          | -         |  |  | -     |  |  | 72,300    |   |  | -      |   |  | - |  |  |   |  |  | -          |   |  | - |  |  | 72,300    | 
|Shares issued in February 2007 pursuant to private                 |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|placement at $1.20 per share, net of costs
      and fees          | 101,770   |  |  | 102   |  |  | 107,898   |   |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | 108,000   | 
|Shares issued in February 2007 in exchange for services            |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|at approximately $1.20                                             | 607,500   |  |  | 607   |  |  | 728,393   |   |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | 729,000   | 
|Shares issued in February 2007 pursuant to private                 |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|placement at $.60 per share, net of costs
      and fees           | 166,800   |  |  | 167   |  |  | 99,913    |   |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | 100,080   | 
|Shares issued in February 2007 in exchange for commission
      in |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|connection with common stock subscribed in
      December 2006     | 43,600    |  |  | 44    |  |  | (44       | ) |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | -         | 
|Shares issued in February 2007 in exchange for services            |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|at approximately $1.90 per share                                   | 10,000    |  |  | 10    |  |  | 18,990    |   |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | 19,000    | 
|Shares issued in March 2007 pursuant to private                    |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|placement at $.65 per share, net of costs
      and fees           | 222,000   |  |  | 222   |  |  | 128,978   |   |  | -      |   |  | - |  |  | - |  |  | -          |   |  | - |  |  | 129,200   | 
|Shares issued in March 2007 in exchange for services               |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|rendered and to be rendered at approximately
      $1.10 per share | 5,063,636 |  |  | 5,064 |  |  | 5,564,936 |   |  | -      |   |  | - |  |  | - |  |  | (3,566,465 | ) |  | - |  |  | 2,003,535 | 
|Shares issued in March 2007 in exchange for services               |           |  |  |       |  |  |           |   |  |        |   |  |   |  |  |   |  |  |            |   |  |   |  |  |           | 
|rendered and to be rendered at approximately
      $1.50 per share | 3,000,000 |  |  | 3,000 |  |  | 4,497,000 |   |  | -      |   |  | - |  |  | - |  |  | (3,643,150 | ) |  | - |  |  | 856,850   | 

See accompanying notes to unaudited condensed consolidated
financial statements. F-10

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|Shares issued in March 2007 in exchange for services                                 |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|------------------------------------------------------------------------------------ | ---------- | - |  | ------ | - |  | -------- | - |  | ------- |  |  | - |  |  | - |  |  | -------- | - |  | ---------- | - |  | ---------- | -
|at approximately 1.30 per share                                                      | 10,000     |   |  | 10     |   |  | 12,990   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 13,000     |  
|Shares issued in March 2007 in exchange for services                                 |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|rendered and to be rendered at approximately
      $1.34 per share                   | 40,000     |   |  | 40     |   |  | 53,560   |   |  | -       |  |  | - |  |  | - |  |  | (32,453  | ) |  | -          |   |  | 21,147     |  
|Shares issued in March 2007 for commission in                                        |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|connection with common stock subscribed                                              | 36,604     |   |  | 37     |   |  | (37      | ) |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | -          |  
|Shares issued in April 2007 pursuant to private                                      |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|placement at $1.00 per share, net of costs
      and fees                            | 14,400     |   |  | 14     |   |  | 12,986   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 13,000     |  
|Shares issued in April 2007 in exchange for services                                 | 32,500     |   |  | 32     |   |  | 32,868   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 32,900     |  
|Shares issued in May 2007 pursuant to private                                        |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|placement at $1.00 per share, net of costs and fees                                  | 17,500     |   |  | 17     |   |  | 15,733   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 15,750     |  
|Shares issued in May 2007 pursuant to private                                        |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|placement at $.80 per share, net of costs and fees                                   | 56,250     |   |  | 56     |   |  | 40,944   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 41,000     |  
|Shares issued in May 2007 in exchange for
      services rendered and to be rendered | 500,000    |   |  | 500    |   |  | 524,500  |   |  | -       |  |  | - |  |  | - |  |  | (408,493 | ) |  | -          |   |  | 116,507    |  
|Shares issued in June 2007 pursuant to private                                       |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|placement at $.80 per share, net of costs
      and fees                             | 112,500    |   |  | 113    |   |  | 80,877   |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 81,000     |  
|Shares issued in June 2007 in exchange for services rendered                         | 394,780    |   |  | 395    |   |  | 315,429  |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 315,824    |  
|                                                                                     |            |   |  |        |   |  |          |   |  |         |  |  |   |  |  |   |  |  |          |   |  |            |   |  |            |  
|Exercise of put agreement and cancellation of put shares (Note
      D)              | (2,311,346 | ) |  | (2,311 | ) |  | (844,115 | ) |  | -       |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | (846,426   | )
|Common stock subscribed                                                              | -          |   |  | -      |   |  | -        |   |  | 237,001 |  |  | - |  |  | - |  |  | -        |   |  | -          |   |  | 237,001    |  
|Amortization of deferred officer compensation (Note C)                               | -          |   |  | -      |   |  | -        |   |  | -       |  |  | - |  |  | - |  |  | 545,479  |   |  | -          |   |  | 545,479    |  
|Net loss                                                                             | -          |   |  | -      |   |  | -        |   |  | -       |  |  | - |  |  | - |  |  | -        |   |  | (7,606,367 | ) |  | (7,606,367 | )

See accompanying notes to unaudited condensed consolidated
financial statements. F-11

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF (DEFICIENCY IN) STOCKHOLDERS
EQUITY (Continued) FOR THE PERIOD FEBRUARY 9, 2005 (DATE OF INCEPTION)
THROUGH JUNE 30, 2007 (Unaudited)

|Other Comprehensive income:       |            |  |   |        |  |   |            |  |   |         |  |   |        |   |   |          |   |   |             |   |   |             |   |   |          |  
|--------------------------------- | ---------- |  | - | ------ |  | - | ---------- |  | - | ------- |  | - | ------ | - | - | -------- | - | - | ----------- | - | - | ----------- | - | - | -------- | -
|Foreign exchange translation gain | -          |  |   | -      |  |   | -          |  |   | -       |  |   | -      |   |   | (10,644  | ) |   | -           |   |   | -           |   |   | (10,644  | )
|Balance at June 30, 2007          | 71,373,816 |  | $ | 71,372 |  | $ | 25,169,979 |  | $ | 237,001 |  | $ | (3,300 | ) | $ | ( 11,841 | ) | $ | (10,771,749 | ) | $ | (15,672,309 | ) | $ | (980,847 | )

See accompanying notes to unaudited condensed consolidated
financial statements.F-12

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

|                                                         |   | For the    |   |   | For the       |   |   | For the period from |  
|-------------------------------------------------------- | - | ---------- | - | - | ------------- | - | - | ------------------- | -
|                                                         |   | six        |   |   | six           |   |   | February 9,         |  
|                                                         |   | Months     |   |   | Months        |   |   | of inception )      |  
|                                                         |   | June 30,   |   |   | June 30,      |   |   | June 30,            |  
|                                                         |   | 2007       |   |   | 2006          |   |   | 2007                |  
|INCREASE IN CASH AND EQUIVALENTS                         |   |            |   |   |               |   |   |                     |  
|CASH FLOWS FROM OPERATING                                |   |            |   |   |               |   |   |                     |  
|Net loss from exploration stage operations               | $ | (7,606,367 | ) | $ | (2,068,931    | ) | $ | (15,672,309         | )
|Loss on discontinued operations                          |   | 9,468      |   |   | 22,128        |   |   | 140,833             |  
|Loss from continuing operations                          |   | (7,596,899 | ) |   | (2,046,803    | ) |   | (15,531,476         | )
|Depreciation                                             |   | 9,220      |   |   | 12,788        |   |   | 16,645              |  
|Common stock issued in exchange for
      services       |   | 4,158,763  |   |   | 710,234       |   |   | 7,356,106           |  
|Common stock issued in exchange for exploration          |   | -          |   |   | -             |   |   | 42,500              |  
|expenditure (Note B)                                     |   |            |   |   |               |   |   |                     |  
|Stock options issued in exchange for services            |   | 72,300     |   |   | 26,845        |   |   | 99,145              |  
|Amortization of deferred compensation (Note
      C)     |   | 545,480    |   |   | 545,480       |   |   | 2,378,813           |  
|Common stock issued to founders                          |   | -          |   |   | -             |   |   | 10,000              |  
|Loss on put agreement (Note D)                           |   | 20,789     |   |   | -             |   |   | 141,105             |  
|Impairment of investment (Note F)                        |   | 1,500      |   |   | -             |   |   | 1,500               |  
|Adjustments to reconcile net loss from
      exploration |   |            |   |   |               |   |   |                     |  
|stage operations to cash                                 |   |            |   |   |               |   |   |                     |  
|used in operating activities:                            |   |            |   |   |               |   |   |                     |  
|Changes in assets and liabilities:                       |   |            |   |   |               |   |   |                     |  
|Prepaid expenses and other assets                        |   | (86,270    | ) |   | (15,551       | ) |   | (289,583            | )
|Other receivables                                        |   | 95,000     |   |   | -             |   |   | -                   |  
|Other payables                                           |   | 50,000     |   |   | -             |   |   | 50,000              |  
|Accounts payable and accrued expenses                    |   | 187,904    |   |   | (
      4,420 | ) |   | 454,687             |  
|Net cash used in continuing operations                   |   | (2,542,213 | ) |   | (771,427      | ) |   | (5,270,558          | )
|Net cash used in discontinued operations (Note F)        |   | (11,555    | ) |   | (50,023       | ) |   | (121,927            | )
|NET CASH USED IN OPERATING                               |   | (2,553,768 | ) |   | (821,450      | ) |   | (5,392,485          | )
|CASH FLOWS FROM INVESTING                                |   |            |   |   |               |   |   |                     |  
|Capital expenditures                                     |   | (66,237    | ) |   | (27,386       | ) |   | (136,084            | )
|Net cash used in continuing operations                   |   | (66,237    | ) |   | (27,386       | ) |   | (136,084            | )
|Net cash provided by discontinued
      operations       |   | 11,205     |   |   |               |   |   | (18,906             | )
|NET CASH USED IN INVESTING ACTIVITIES                    |   | (55,032    | ) |   | -             |   |   | (154,990            | )
|CASH FLOWS FROM FINANCING                                |   |            |   |   |               |   |   |                     |  
|Net cash paid in connection with put agreement           |   | (1,503,392 | ) |   | -             |   |   | (1,503,392          | )
|Proceeds from sale of common stock and
      common      |   |            |   |   |               |   |   |                     |  
|stock subscription,                                      |   |            |   |   |               |   |   |                     |  
|net of costs and fees (Note B)                           |   | 809,449    |   |   | 755,062       |   |   | 6,179,017           |  
|Proceeds from related parties advances, net of           |   | 1,150,601  |   |   | (33,461       | ) |   | 1,150,601           |  
|NET CASH PROVIDED BY(USED IN)                            |   | 456,658    |   |   | 721,601       |   |   | 5,826,226           |  
|FINANCING ACTIVITIES                                     |   |            |   |   |               |   |   |                     |  
|Effect of exchange rate changes on cash and
      cash   |   | (11,785    | ) |   | -             |   |   | (4,697              | )
|equivalents                                              |   |            |   |   |               |   |   |                     |  
|NET INCREASE (DECREASE) IN CASH AND                      |   | (2,163,927 | ) |   | (127,235      | ) |   | 274,054             |  
|EQUIVALENTS                                              |   |            |   |   |               |   |   |                     |  
|Cash and cash equivalents at the beginning
      of the  |   | 2,437,981  |   |   | 327,049       |   |   | -                   |  

See accompanying notes to unaudited condensed consolidated
financial statements. F-13

---

HEMIS CORPORATION (An exploration stage company)CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

|Cash and cash equivalents at the end of
      the  | $ | 274,054   |  | $ | 199,81  |  | $ | 274,054   | 
|-------------------------------------------------- | - | --------- |  | - | ------- |  | - | --------- | 
|Supplemental Disclosures of Cash Flow              |   |           |  |   |         |  |   |           | 
|Cash paid during the period for interest           | $ | -         |  | $ | -       |  | $ | -         | 
|Income taxes paid                                  |   | -         |  |   | -       |  |   | -         | 
|Common stock issued in exchange for
      services |   | 4,158,763 |  |   | 710,234 |  |   | 4,828,794 | 
|Common stock issued in exchange for exploration    |   | -         |  |   | -       |  |   | 42,500    | 
|expenditures (Note B)                              |   |           |  |   |         |  |   |           | 
|Stock options issued in exchange for services      |   | 72,300    |  |   | 26,845  |  |   | 99,145    | 
|rendered (Note C)                                  |   |           |  |   |         |  |   |           | 
|Stock options granted in exchange for deferred     |   | -         |  |   | -       |  |   | 5,500,000 | 
|compensation                                       |   |           |  |   |         |  |   |           | 
|Cash held in trust (Note A)                        |   | -         |  |   | 35,510  |  |   | 22,742    | 
|Common stock issued to founders                    |   | -         |  |   | -       |  |   | 10,000    | 

See accompanying notes to unaudited condensed consolidated
financial statements. F-14

---

HEMIS CORPORATION. (An exploration stage
company)NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (Continued) JUNE 30, 2007

NOTE A-SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the
preparation of the accompanying condensed consolidated financial statements
follows.

General

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
with the instructions to Form 10-QSB. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.

In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Accordingly, the results from operations for the three and six
month period ended June 30, 2007, are not necessarily indicative of the results
that may be expected for the year ended December 31, 2007. The unaudited
condensed consolidated financial statements should be read in conjunction with
the consolidated December 31, 2006 financial statements and footnotes thereto
included in the Company's SEC Form 10-KSB.

Business and Basis of Presentation

Hemis Corporation (the "Company") was incorporated under the
laws of the State of Nevada on February 9, 2005. On May 16, 2005, the Company
incorporated Hemis Gold S.A. de C.V., a wholly owned subsidiary in Mexico. The
Company was organized for the purpose of acquiring and developing gold, silver
and other mineral properties.

On June 14, 2005, the Company incorporated under the laws of
the State of Nevada a wholly owned subsidiary, Aurum Financial Services, Inc.
(Aurum). In June 2006, the Companys Board of Directors authorized to spin off
Aurum. Effective July 1, 2006, Aurum is formally spun off and is no longer a
subsidiary of the Company (Note F).

In June 2006 the Company incorporated under the laws of
Philippines a wholly owned subsidiary, Hemis Philippines Corporation. During the
first quarter of 2007, the Company management decided to proceed with the plan
of discontinuing operations of this subsidiary. Substantially all assets of the
Philippines subsidiary were liquidated to pay off outstanding accounts payable
and office expenses incurred during the first quarter of 2007 (Note F).

The financial statements reflect the operating results and
balance sheet items of the discontinued operations separately from continuing
operations. Prior years have been restated. Operating results for the
discontinued operations are described in Note F.

In January 2006 the Company incorporated under the laws of the
State of Nevada four wholly owned subsidiaries, Tecton Corporation, Stratos Gold
Corporation, Allegra Corporation and Sirius Corporation.

F-15

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

In September 2006, the Companys Board of Directors authorized
to spin off Stratos Gold Corporation (Stratos), by issuing to the Companys
shareholders as of September 1, 2006 (Record Date) one share of Stratos for
every 50 shares of the Companys common stock owned by the shareholders.
Effective September 1, 2006, Stratos is formally spun off and is no longer a
subsidiary of the Company. Stratos had no operations prior to the spin-off (Note
F). In December 2006, the Companys Board of Directors authorized to spin off
Tecton Corporation (Tecton), by issuing to the Companys shareholders as of
December 1, 2006 (Record Date) one share of Tecton for every 100 shares of the
Companys common stock owned by the shareholders. Effective December 1, 2006,
Tecton is formally spun off and is no longer a subsidiary of the Company. Tecton
had no operations prior to the spin-off (Note F).

In January 2007, the Companys Board of Directors authorized to
spin off one of its wholly-owned subsidiary, Allegra Corporation (Allegra), by
issuing to the Companys shareholders as of January 12, 2007 (Record Date) one
share of Allegra for every 100 shares of the Companys common stock owned by the
shareholders. Effective January 12, 2007, Allegra is formally spun off and is no
longer a subsidiary of the Company. Allegra had no operations prior to the
spin-off (Note F).

In January 2007, the Companys Board of Directors authorized to
spin off one of its wholly-owned subsidiary, Sirius Corporation (Sirius), by
issuing to the Companys shareholders as of January 12, 2007 (Record Date) one
share of Sirius for every 100 shares of the Companys common stock owned by the
shareholders. Effective January 12, 2006, Sirius is formally spun off and is no
longer a subsidiary of the Company. Sirius had no operations prior to the
spin-off (Note F).

The Company currently has only one active subsidiary, Hemis
Gold S.A. de C.V. Significant intercompany transactions and accounts have been
eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased with a maturity date of
three months or less to be cash equivalents. Cash and cash equivalents consist
of operating funds held in financial institutions and funds held by an entity
partially owned and controlled by the Companys Chief Executive Officer and
principal shareholder. The amount of funds held by the Chief Executive Officer
at June 30, 2007 and December 31, 2006 was $0 and $51,617, respectively, and
included in the cash and cash equivalents. The funds are used to pay for the
Company's miscellaneous services and supplies.

Cash Held in Trust

At June 30, 2007 and December 31, 2006, the Company had $0 and
$23,468, respectively, of cash held in a lawyer's trust account and the
Companys lawyer has authority to use the funds to pay legal bills, consulting
fees, and expenses. There was no formal escrow agreement, and the President of
the Company has the authority to allocate the trust funds and to withdraw the
funds from trust at any time. The Company has excluded the cash held in trust
from its cash and cash equivalents and accounted for as a current asset.

F-16

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Mineral Properties and Exploration Costs

Mineral property interests are composed of mineral properties
owned by the Company and rights to ownership of mineral properties which the
Company can earn through cash or share payments, incurring exploration
expenditures and combinations thereof. The Company accounts for its mineral
property interests whereby all acquisition and exploration costs are charged to
expense as incurred, and all property sales and option proceeds received are
credited to operations. When the existence of a mineral reserve on a property
has been established, future acquisition, exploration and development costs will
be capitalized for that property. After commercial production on a property
commences, the net capitalized costs will be charged to future operations using
the unit of production method based on estimated recoverable reserves on the
property. Mineral properties are periodically assessed for impairment of value
and any diminution in value is charged to operations at the time of impairment.
Should a property be abandoned, its unamortized capitalized costs are charged to
operations. As of June 30, 2007, all mineral claim costs of carrying, retaining
and developing unproven properties were charged to operations in the period
incurred.

Mineral Property Reclamation Obligations

The operations of the Company have been and may in the future
be affected from time to time in varying degree by changes in environmental
regulations, including those for future removal and site restoration costs. The
likelihood of new regulations and their overall effect upon the Company are not
predictable. The Company will provide for any reclamation costs in accordance
with Financial Accounting Standard No. 143 Accounting for Asset Retirement
Obligations. It is managements opinion that the Company is not currently
exposed to significant environmental and reclamation liabilities and has
recorded no reserve for environmental and reclamation expenditures.

Revenue Recognition

The Company is in exploration stage and has not generated any
revenues as of December 31, 2005. The Company will recognize revenues pursuant
to the guidance in Staff Accounting Bulletin (SAB) No. 104, Revenue
Recognition, revenue will be recognized when persuasive evidence of an
arrangement exists, delivery has occurred through an irrevocable transfer of
metals to customers accounts or physical delivery of metals, the price is fixed
or determinable, no obligations remain and collectibility is probable. Under the
terms of certain sales contracts and purchase orders received from customers,
the Company will recognize revenue when the product is in a refined and saleable
form and title passes, which is typically when the product is transferred from
the account of the Company to the account of the customer. Under certain of its
sales agreements, the Company may instruct a third-party refiner to transfer
metal from the Companys account to the customers account; at this point, the
Companys account at the third party refinery is reduced and the purchasers
account is increased by the number of ounces of metal sold. These transfers are
irrevocable and the Company has no further responsibility for the delivery of
the metals. Under other sales agreements, physical conveyance may occur by the
Company arranging for shipment of metal from the third party refinery to the
purchaser. In these cases, revenue is recognized at the point when delivery
occurs and title passes to the purchaser. Sales discounts will be recognized
when the related revenue is recorded. The Company will classify any cash sales
discounts as a reduction in revenue. Sales of metals products sold directly to
smelters will be recorded when title and risk of loss transfer to the smelter at
current spot metals prices. Recorded values will be adjusted monthly until final
settlement. Sales of metal in products tolled, rather than sold to smelters,
will be recorded at contractual

F-17

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Revenue Recognition (continued)

amounts when title and risk of loss transfer to the buyer.

Reclassifications

Certain reclassifications have been made in prior years
financial statements to conform to classifications used in the current year.

Recent accounting pronouncements

In February 2007, the FASB issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities. SFAS 159 permits
entities to choose to measure many financial instruments, and certain other
items, at fair value. SFAS 159 applies to reporting periods beginning after
November 15, 2007. The adoption of SFAS 159 is not expected to have a material
impact on the Companys financial condition or results of operations.

NOTE B - CAPITAL STOCK

The Company was authorized to issue 75,000,000 shares of common
stock with par value of $.001 per share. In April 2006, the Companys Board of
Directors passed a resolution to increase the Companys authorized shares of
common stock from 75,000,000 shares to 150,000,000 shares with a par value of
$.001 per share. The Company has 71,373,816 and 20,309,373 shares of common
stock issued and outstanding at June 30, 2007 and December 31, 2006,
respectively.

On May 1 2005, the Company issued an aggregate of 10,000,000
shares of common stock to founders. The common shares issued were valued at par
value of the Companys common stock.

In May 2005, the Company issued an aggregate of 30,000 shares
of common stock in exchange for cash at $0.55 per share.

In July 2005, the Company issued an aggregate of 500 shares of
common stock in exchange for cash at $0.55 per share. The Company also issued an
aggregate of 100,000 shares of common stock in exchange for services rendered at
$0.55 per share, which approximated the fair value of shares issued during the
period services were rendered. Compensation costs of $55,000 were charged to
operations during the year ended December 31, 2005. In August 2005, the Company
issued an aggregate of 458,183 shares of common stock in exchange for cash at
$0.55 per share. The Company incurred commission costs of $25,200 in connection
with the issuance of these common shares.

F-18

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

In September 2005, the Company issued an aggregate of 100,000
shares of common stock in exchange for services rendered at $0.55 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $55,000 were charged to operations during
the year ended December 31, 2005.

In December 2005, the Company received proceeds of $430,625,
net of $7,150 of commission, for 795,957 shares of common stock subscribed at
$0.55 per share. The common shares subscribed were issued to subscribers in the
first quarter of 2006.

In January 2006, the Company issued an aggregate of 593,638
shares of common stock in exchange for common stock subscribed in December 2005.

In February 2006, the Company issued an aggregate of 274,795
shares of common stock at $0.55 per share in exchange for $93,125 of common
stock subscribed in December 2005 and proceeds of $48,012, net of costs and
fees.

In March 2006, the Company issued an aggregate of 164,337
shares of common stock at $0.55 per share in exchange for $11,000 of common
stock subscribed in December 2005 and proceeds of $68,549, net of costs and
fees.

In May 2006, the Company issued an aggregate of 480,000 shares
of common stock at $0.55 per share in exchange for proceeds of $240,625, net of
costs and fees, and stock subscription receivable in the amount of $3,300. The
Company incurred commission costs of $20,075 in connection with the issuance of
these common shares.

In May 2006, the Company issued an aggregate of 25,000 shares
of common stock at $0.75 per share in exchange for proceeds of $16,875, net of
costs and fees. The Company incurred commission costs of $1,875 in connection
with the issuance of these common shares.

In May 2006, the Company issued an aggregate of 1,070,880
shares of common stock in exchange for services rendered at $0.55 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $588,984 were charged to operations during
the year ended December 31, 2006.

In June 2006, the Company issued an aggregate of 308,772 shares
of common stock at $0.55 per share in exchange for proceeds of $164,325, net of
costs and fees. The Company incurred commission costs of $5,500 in connection
with the issuance of these common shares.

In June 2006, the Company issued an aggregate of 150,000 shares
of common stock at $0.75 per share in exchange for proceeds of $102,379, net of
costs and fees. The Company incurred commission costs of $10,121 in connection
with the issuance of these common shares.

In June 2006, the Company issued an aggregate of 50,000 shares
of common stock in exchange for services rendered at $0.55 per share, which
approximated the fair value of shares issued during the period services were
rendered. Compensation costs of $27,500 were charged to operations during the
year ended December 31, 2006.

F-19

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

In June 2006, the Company issued an aggregate of 125,000 shares
of common stock in exchange for services rendered at $0.75 per share, which
approximated the fair value of shares issued during the period services were
rendered. Compensation costs of $93,750 were charged to operations during the
year ended December 31, 2006. In August 2006, the Company issued an aggregate of
1,033,730 shares of common stock at $0.75 per share in exchange for proceeds of
$700,854 net of costs and fees. The Company incurred commission costs of $74,444
in connection with the issuance of these common shares.

In August 2006, the Company issued an aggregate of 5,000 shares
of common stock in exchange for services rendered at $0.75 per share, which
approximated the fair value of shares issued during the period services were
rendered. Compensation costs of $3,750 were charged to operations during the
year ended December 31, 2006. In September 2006, the Company issued an aggregate
of 961,428 shares of common stock at $0.75 per share in exchange for proceeds of
$625,050 net of costs and fees. The Company incurred commission costs of $96,021
in connection with the issuance of these common shares.

In October 2006, the Company issued an aggregate of 244,000
shares of common stock at $0.75 per share in exchange for proceeds of $167,775
net of costs and fees. The Company incurred commission costs of $15,225 in
connection with the issuance of these common shares.

In October 2006, the Company issued an aggregate of 1,500,000
shares of common stock in exchange for services rendered at $0.75 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $1,125,000 were charged to operations
during the year ended December 31, 2006.

In October 2006, the Company issued 25,000 shares of common
stock in exchange for exploration expenditures pursuant to an agreement dated
September 7, 2006 (Note E). The shares issued were valued at $0.75 per share.
Exploration expenditures of $18,750 were charged to operations during the year
ended December 31, 2006.

In October 2006, the Company issued an aggregate of 357,420
shares of common stock at $0.95 per share in exchange for proceeds of $312,320
net of costs and fees. The Company incurred commission costs of $27,229 in
connection with the issuance of these common shares.

In October 2006, the Company issued an aggregate of 25,000
shares of common stock in exchange for exploration expenditures pursuant to an
agreement dated June 19, 2006 (Note E). The shares issued were valued at $0.95
per share. Exploration expenditures of $23,750 were charged to operations during
the year ended December 31, 2006.

In November 2006, the Company issued an aggregate of 52,614
shares of common stock at $0.75 per share in exchange for proceeds of $31,960
net of costs and fees. The Company incurred commission costs of $7,500 in
connection with the issuance of these common shares.

In November 2006, the Company issued an aggregate of 295,528
shares of common stock at $0.95 per share in exchange for proceeds of $260,608
net of costs and fees. The Company incurred commission costs of $20,143 in
connection with the issuance of these common shares.

F-20

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

In November 2006, the Company issued an aggregate of 1,310,180
shares of common stock in exchange for services rendered at approximately $0.95
per share, which approximated the fair value of shares issued during the period
services were rendered. Compensation costs of $1,244,245 were charged to
operations during the year ended December 31, 2006.

In December 2006, the Company issued an aggregate of 15,789
shares of common stock at $0.95 per share in exchange for proceeds of $13,500,
net of costs and fees. The Company incurred commission costs of $1,500 in
connection with the issuance of these common shares.

In December 2006, the Company issued an aggregate of 549,150
shares of common stock at $1.20 per share in exchange for proceeds of $611,600,
net of costs and fees. The Company incurred commission costs of $12,400 in
connection with the issuance of these common shares.

In December 2006, the Company issued an aggregate of 3,429
shares of common stock in exchange for services rendered at $1.20 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $4,111 were charged to operations during
the year ended December 31, 2006. During the year ended December 31, 2006, the
Company received additional net proceeds in the amount of $1,330,938 for
1,158,332 shares of common stock subscribed. These shares were issued in January
2007.

In January 2007, the Company issued an aggregate of 1,154,862
shares of common stock in exchange for $1,326,774 of common stock subscribed
during the year ended December 2006.

In January 2007, the Company issued an aggregate of 4,100
shares of common stock in exchange for commissions in connection with common
stock subscribed during the year ended December 31, 2006.

In January 2007, the Company paid $33,582 of commission in
connection with common stock subscribed during the year ended December 2006.

In January 2007, the Company issued an aggregate of 115,091
shares of common stock at $1.20 per share in exchange for proceeds of $108,000,
net of costs and fees. The Company incurred commission costs of $30,109 in
connection with the issuance of these common shares.

In January 2007, the Company issued an aggregate of 10,000,000
shares of common stock at $.001 per share in exchange for proceeds of $10,000,
for the exercise of stock options (Note C).

In January 2007, the Company issued an aggregate of 42,500
shares of common stock in exchange for services rendered at $1.20 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $51,000 were charged to operations during
the six months ended June 30, 2007.

On January 17, 2007 the Company declared a stock dividend in
the amount of one common share of the Company to be issued for every one common
share of the Company issued as of the Record Date of January 17, 2007. The
aggregate number of common shares issued as a stock dividend 31,625,926. This
excluded 50,000 shares of common stock that should been cancelled prior to the
date of dividend. The Company corrected this error and cancelled the shares in
March 2007.

F-21

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

In January 2007, the Company issued an aggregate of 3,470
shares of common stock in exchange for $4,164 of common stock subscribed during
the year ended December 31, 2006.

In February 2007, the Company issued an aggregate of 101,770
shares of common stock at $1.20 per share in exchange for proceeds of $108,000,
net of costs and fees. The Company incurred commission costs of $14,124 in
connection with the issuance of these common shares.

In February 2007, the Company issued an aggregate of 607,500
shares of common stock in exchange for services rendered at $1.20 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $729,000 were charged to operations during
the six months ended June 30, 2007.

In February 2007, the Company issued an aggregate of 166,800
shares of common stock in exchange for proceeds of $100,080, net of costs and
fees. The subscription agreement was entered into in December 2006 for 83,400
shares at $1.20 per share. Due to an administrative delay this subscription
agreement was not processed until February 2007. In February 2007, the Company
agreed to issue additional 83,400 shares of common stock to the investors at no
costs to compensate the investors for the delay.

In February 2007, the Company issued an aggregate of 43,600
shares of common stock in exchange for commissions in connection with common
stock subscribed during the year ended December 31, 2006.

In February 2007, the Company issued an aggregate of 10,000
shares of common stock in exchange for services rendered at $1.90 per share,
which approximated the fair value of shares issued during the period services
were rendered. Compensation costs of $19,000 were charged to operations during
the six months ended June 30, 2007.

In March 2007, the Company issued an aggregate of 222,000
shares of common stock at $.65 per share in exchange for proceeds of $129,200,
net of costs and fees. The Company incurred commission costs of $15,100 in
connection with the issuance of these common shares.

In March 2007, the Company issued an aggregate of 5,063,636
shares of common stock to a consultant in exchange for services rendered and to
be rendered from February 2007 through February 2008. The common shares issued
were valued at $1.10 per share, which was estimated to be approximate the fair
value of the Companys common shares during the period covered by the consulting
agreement. The Company amortized and charged to operations compensation expense
of $2,003,535 during the six months ended June 30, 2007. The unamortized portion
of $3,566,465 was accounted for as deferred compensation and will be amortized
over the remaining period that the services will be provided. In the event that
the Companys stock price increases significantly in future periods, the Company
will revalue the stock issued and additional compensation will be charged to
operations. .

In March 2007, the Company issued an aggregate of 3,000,000
shares of common stock to a consultant in exchange for services rendered and to
be rendered from March 13, 2007 through March 13, 2009. The common shares issued
were valued at $1.50 per share, which was estimated to be approximate the fair
value of the Companys common shares during the period covered by the consulting
agreement. The Company amortized and charged to operations compensation expense
of $856,850 during the six months ended June 30, 2007. The unamortized portion
of $3,643,150 was accounted for as deferred compensation and will be amortized
over the

F-22

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

remaining period that the services will be provided. In the
event that the Companys stock price increases significantly in future periods,
the Company will revalue the stock issued and additional compensation will be
charged to operations.

In March 2007, the Company issued an aggregate of 10,000 shares
of common stock in exchange for services rendered at $1.30 per share, which
approximated the fair value of shares issued during the period services were
rendered. Compensation costs of $13,000 were charged to operations during the
six months ended June 30, 2007.

In March 2007, the Company issued an aggregate of 40,000 shares
of common stock to a consultant in exchange for services rendered and to be
rendered through October 1, 2008. The common shares issued were valued at $1.34
per share, which was estimated to be approximate the fair value of the Companys
common shares during the period covered by the consulting agreement. The Company
amortized and charged to operations compensation expense of $21,147 during the
six months ended June 30, 2007. The unamortized portion of $32,453 was accounted
for as deferred compensation and will be amortized over the remaining period
that the services will be provided. In the event that the Companys stock price
increases significantly in future periods, the Company will revalue the stock
issued and additional compensation will be charged to operations.

In March 2007, the Company issued an aggregate of 36,604 shares
of common stock in exchange for commissions in connection with common stock
subscribed.

In April 2007, the Company issued an aggregate of 14,400 shares
of common stock at $1.00 per share in exchange for proceeds of $13,000, net of
costs and fees. The Company incurred commission costs of $1,400 in connection
with the issuance of these common shares.

In April 2007, the Company issued an aggregate of 12,500 shares
  of common stock to a consultant in exchange for services rendered. The common
  shares issued were valued at $1.40 per share, which approximated the fair value
  of shares issued during the period services were rendered. Compensation costs
  of $17,500 were charged to operations during the six months ended June 30, 2007.

In April 2007, the Company issued an aggregate of 20,000 shares
  of common stock to a consultant in exchange for services rendered. The common
  shares issued were valued at $.77 per share, which approximated the fair value
  of shares issued during the period services were rendered. Compensation costs
  of $15,400 were charged to operations during the six months ended June 30, 2007.

F-23

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE B - CAPITAL STOCK (Continued)

In May 2007, the Company issued an aggregate of 17,500 shares
of common stock at $1.00 per share in exchange for proceeds of $15,750, net of
costs and fees. The Company incurred commission costs of $1,750 in connection
with the issuance of these common shares.

In May 2007, the Company issued an aggregate of 56,250 shares
of common stock at $.80 per share in exchange for proceeds of $41,000, net of
costs and fees. The Company incurred commission costs of $4,000 in connection
with the issuance of these common shares.

In May 2007, the Company issued an aggregate of 500,000 shares
of common stock to a consultant in exchange for services rendered and to be
rendered through April 10, 2008. The common shares issued were valued at $1.05
per share, which was estimated to be approximate the fair value of the Companys
common shares during the period covered by the consulting agreement. The Company
amortized and charged to operations compensation expense of $116,507 during the
six months ended June 30, 2007. The unamortized portion of $408,493 was
accounted for as deferred compensation and will be amortized over the remaining
period that the services will be provided. In the event that the Companys stock
price increases significantly in future periods, the Company will revalue the
stock issued and additional compensation will be charged to operations.

In June 2007, the Company issued an aggregate of 112,500 shares
of common stock at $.80 per share in exchange for proceeds of $81,000, net of
costs and fees. The Company incurred commission costs of $9,000 in connection
with the issuance of these common shares.

In June 2007, the Company issued an aggregate of 394,780 shares
of common stock to a consultant in exchange for services rendered . The common
shares issued were valued at $.80 per share, which approximated the fair value
of shares issued during the period services were rendered. Compensation costs of
$315,824 were charged to operations during the six months ended June 30, 2007.

During the period ended June 30, 2007, the Company received
additional proceeds in the amount of $237,051 for 357,000 shares of common stock
subscribed. Subsequent to the date of the financial statements, 315,000 shares
have been issued.

NOTE C - STOCK OPTIONS

The following table summarizes the changes in options
outstanding and the related prices for the shares of the Company's common stock
issued to its officers.

Options Outstanding
      Options ExercisableWeighted AverageRemaining
      Weighted
      
      WeightedExercise
      Number
      Contractual
      Average
      Number
      AveragePrices
      Outstanding
      Life (Years)
      Exercise Price
      Exercisable
      Exercise Price$ 1.50
      50,000
      4.50
      $ 1.50
      50,000
      $ 1.50$ 1.00
      50,000
      3.50
      $ 1.00
      50,000
      $ 1.00100,000
      4.00
      $ 1.25
      100,000
      $ 1.25


F-24

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE C - STOCK OPTIONS (continued)

Transactions involving stock options issued to employees are
summarized as follows:

|                                     |  |             |   |   | Weighted        | 
|------------------------------------ |  | ----------- | - | - | --------------- | 
|                                     |  | Number of   |   |   | Price Per Share | 
|Balance at February 9, 2005 (date of |  | -           |   | $ | -               | 
|Granted                              |  | 10,000,000  |   |   | 0.001           | 
|Exercised                            |  | -           |   |   |                 | 
|Cancelled or expired                 |  | -           |   |   | -               | 
|Outstanding at December 31, 2005     |  | 10,000,000  |   | $ | 0.001           | 
|Granted                              |  | 50,000      |   |   | 1.00            | 
|Exercised                            |  | -           |   |   | -               | 
|Cancelled or expired                 |  | -           |   |   | -               | 
|Outstanding at December 31, 2006     |  | 10,050,000  |   | $ | 0.01            | 
|Granted                              |  | 50,000      |   |   | 1.50            | 
|Exercised                            |  | (10,000,000 | ) |   | 0.001           | 
|Cancelled or expired                 |  | -           |   |   | -               | 
|Outstanding at June 30, 2007         |  | 100,000     |   | $ | 1.25            | 

In May 2005, the Company granted an aggregate of 10,000,000
stock options to its officers in exchange for services provided and to be
provided over the period of 5 years pursuant to the option agreements. The
Company concluded that these officers were not employees as defined under
Statements of Financial Accounting Standards (SFAS)123 R: Share Based Payments
and under the definition of common law and Internal Revenue Service regulations,
Revenue Rulings 57-246, 68-597 and 87-41, and the Internal Revenue Services'
Employment Tax Handbook. The exercise prices of the stock options granted were
at par. The options vested in full at grant and are exercisable anytime within 5
years from the grant date. The options granted are intended to retain the
services of these officers over a five-year service period, and the Company does
not intend to issue more options to these officers until the 5-year service term
expires in year 2010, at which time the performance will be reviewed and
additional rewards will be determined. The Company accounted for the stock
options at the fair market value of the Company's common stock. Deferred
compensation cost in the amount of $5,500,000 was recorded as a reduction of
stockholders' equity and will be amortized over the 5-year period of services to
be provided by the officers. Compensation expense of $545,480 was charged to
operations for the six months period ended June 30, 2007 and 2006. Should the
officers terminate the service agreements within 5 years, the Company has no
rights to cancel the options issued and will charged all unamortized costs to
operations at that time. The terms of these options were required by the
officers at the time the option and service agreements were entered into, and
the Company determined that it was necessary to agree to these terms in order to
retain the services of the officers. In January 2007, the officers exercised the
stock options in exchange for an aggregate of 10,000,000 shares of the Companys
common stock (Note B).

In January 2006, the Company granted an aggregate of 50,000
stock options to a consultant in exchange for services rendered. The estimated
value of the stock options vested during the year ended December 31, 2006 was
determined using the Black-Scholes option pricing model and the following
assumptions: expected option life of 5 years, a risk free interest rate of
5.125%, a dividend yield of 0% and volatility of 208%. Compensation expense of
$26,845 was charged to operations during the year ended December 31, 2006.

F-25

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE C - STOCK OPTIONS (Continued)

In January 2007, the Company granted an aggregate of 50,000
stock options to a consultant in exchange for services rendered. The estimated
value of the stock options vested during the six months period ended June 30,
2007 was determined using the Black-Scholes option pricing model and the
following assumptions: expected option life of 5 years, a risk free interest
rate of 4.50%, a dividend yield of 0% and volatility of 182%. Compensation
expense of $72,300 was charged to operations during the six months ended June
30, 2007.

NOTE D - PUT AGREEMENT

In October 2006 the Company entered into put agreements with
certain shareholders granting the shareholders an option to put an aggregate of
2,311,346 shares of common stock to the Company, when the Company became
eligible for trading on the NASDAQ-operated Over-the-Counter Bulletin Board
(OTCBB), for a total price of $1,503,392.

The Company accounted for the termination agreement in
accordance withStatement of Financial Accounting Standards No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity (SFAS 150) , and classified the fair value
attributable to the put option as an accrued liability, as the put agreement
embodies an obligation to repurchase the Company's equity shares which would
require the Company to settle the agreement by transferring its assets. The put
option was initially measured at its fair value of $949,392 as of the date of
the agreement.

Assumptions used to estimate the fair value of the put option
are as follows:

Risk-free interest rate
    4.50 %Dividend yield
    -Volatility
    165 %Time to expiration
    0.35 year


Equity was reduced by the original value of the shares, being
$515,852, with the remaining value of $433,540 being charged to other expense.
The fair value of the put option is determined each reporting period with
changes in the fair value recorded as other income or expense. At December 31,
2006, the fair value of the put option was $636,167, accordingly a gain of
$313,224 in connection with the valuation adjustment on the put agreement was
recorded at December 31, 2006. On February 8, 2007, the Company became eligible
for trading on the OTCBB, and the put agreements were exercised. The fair value
of the put option was $656,956 on February 8, 2007, accordingly a loss of
$20,789 in connection with the valuation adjustment on the put agreement was
recorded on February 8, 2007. Upon exercise of the put agreements in February
2007, the Company canceled 2,311,346 shares of common stock.

NOTE E  COMMITMENTS AND CONTINGENCIES

Management Agreements

The Company has management agreements with its President and
Chief Executive Officer, Chief Financial Officer and Secretary, and Chief
Operating Officer and Geologist, all of whom are also Companys significant
shareholders. The Agreements provide terms of compensation and may be terminated
at any time with 14 days notice been delivered by the party.

F-26

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007007

NOTE E  COMMITMENTS AND CONTINGENCIES (Continued)

Advisory Board Agreements

The Company has Advisory Board Agreements with two Board
members. The Agreements provided a term of two years, and may be terminated at
any time with 14 days notice been delivered by the party.

Acquisition of Mining Rights

On December 20, 2005 the Company entered into a Memo of
Understanding, and subsequently a formal option agreement on June 19, 2006 with
Corex Gold Corp.(Corex) to acquire Santa Rita Claim property located in
Zacatecas, Mexico. The option agreement had no initial costs, and the Company
has the right to acquire a 49% interest in the Santa Rita property upon
incurring exploration expenses as agreed upon. Pursuant to the agreement, the
Company committed to exploration expenditures of minimum $200,000 over the first
12 months at which time the Company shall have the rights to withdraw, without
earning any interest. The Company will also issue 25,000 treasury shares to
Corex upon commencement of Phase 1 of the agreement. The 25,000 shares were
issued to Corex in October 2006 (Note B). As of December 31, 2005, the Company
has incurred and charged to operations, $22,519 of expenditures pursuant to this
agreement. On the 1 stanniversary of the agreement, the Company
would commit to exploration expenditures of minimum $300,000 over additional 12
months at which the Company will issue 75,000 treasury shares to Corex. On the 2
ndanniversary, Corex would commit to exploration expenditures of
minimum $450,000 over additional 12 months at which time the Company will issue
100,000 treasury shares to Corex. The Company may terminate the option agreement
at any time hereafter without further obligation or liability to Corex except
respecting payments, which have not at such time made to Corex in relation to
milestones that have been achieved prior to the time of termination. During the
year ended December 31, 2006, the Company incurred and charged to operations
additional exploration expenditures in the amount of $31,177.

On January 29, 2007, the Company entered into a letter
agreement (the 2007 Option Agreement) with Corex. The 2007 Option Agreement
replaces the option agreement dated June 19, 2006, whereby the Companys
interest in the Santa Rita is changed to 49% interest whatever Corex Gold holds
in Santa Rita property as opposed to a 49% interest in the Santa Rita property
itself. During the six months ended June 30, 2007, the Company incurred and
charged to operations exploration expenditures in the amount of $200,000.

On December 31, 2005, the Company's wholly owned subsidiary,
Hemis Gold S.A. de C.V., entered into an option agreement to acquire a 67.5%
interest in the El Tigre located in the Municipality of Sahuaripa, Sonora,
Mexico. The option agreement had no initial costs. If Company incurred $200,000
of exploration expenditures within 548 days from the date of the agreement, the
Company will acquire a 67.5 % interest in the El Tigre Concession and the
Porvenir Concession mineral claims. As of December 31, 2005, the Company has not
incurred expenditures pursuant to this agreement. During the year ended December
31, 2006, the Company incurred and charged to operations additional exploration
expenditures in the amount of $140,227. During the six months ended June 30,
2007, the Company incurred and charged to operations additional exploration
expenditures in the amount of $785,485.

On September 7, 2006 the Company signed an option agreement to
acquire a 75% interest in the mineral rights to the La Centela property. The
agreement was amended on October 4, 2006. The option consists of two parts; an
option for the first 70% and an option for a further 5%. To acquire the first
70% of the mining rights the Company must pay cash consideration of $500,000 and
issue 500,000 common shares to the mineral rights

F-26

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE E  COMMITMENTS AND CONTINGENCIES

Acquisition of Mining Rights (continued)

owner, spend at least $2,000,000 in exploration expenses, all
prior to October 5, 2010, pursuant to a scheduled payment plan described below,
and make a final share payment of 1 share for every ounce of gold the Company
identifies, if the Company identify any gold, to a maximum of 10,000,000 shares.
If the Company exercises the option to acquire 75% of the mineral rights, the
Company may then acquire a further 5% of the total claim by making a cash
payment of $1,000,000.

To exercise the first 70% of the mining rights, the Company
must deliver the following stock and payments to the mining concession owners,
and make the following exploration expenditures:

- pay $25,000 and issue 25,000 common shares by October 14, 2006 (Note B)
- by October 5, 2007, pay an additional $50,000, issue 50,000 more common
  shares and spend $200,000 on exploration expenses;
- by October 5, 2008, pay an additional $75,000, issue 75,000 more common
  shares and spend $200,000 on additional exploration expenses;
- by October 5, 2009, pay an additional $100,000, issue 100,000 more common
  shares and spend an additional $200,000 on exploration expenses;
- by October 5, 2010, pay an additional $250,000, issue 250,000 more common
  shares and spend an additional $3,200,000 on exploration expenses;
- issuance of one common shares for every once of gold the Company estimates
  and identify, up to a maximum of 10,000,000 shares, if the Company can
  identify any gold at the time of making our final payments to exercise the
  option.

On January 8, 2007 the Company entered into an agreement with
Aspen Exploration Corporation (Aspen) pursuant to which Aspen has assigned
offshore prospecting permit applications in an area of the Cook Inlet, Alaska to
the Company. During the six months ended June 30, 2007, the Company incurred and
charged to operations additional exploration expenditures in the amount of
$204,997.

On March 13, 2007 the Company entered into an option agreement
with Stacs GmbH (Stacs) whereby Stacs has agreed to grant Hemis the exclusive
option to acquire the 100% interest in the exploration licenses and mineral
claims comprising the Wolfe Creek and Covenant properties located in British
Columbia, Canada (the Property) subject to a 3% royalty.

On April 19, 2007 the Company won a raffle to determine which
of several concurrent applicants would be able to proceed with an application to
obtain a mining concession on La Casita. La Casita is a mineral exploration
concession which is located close to the Company's El Tigre, Porvenir and La
Centela concessions. The concession will be reserved for the Company by the
Mexican government pending the Company's application and if all of the
formalities are complied with (and all the correct technical information is
supplied), the Company anticipate that it will be granted a 100% interest in the
La Casita mineral concession within two to six months. The Company aims to
integrate exploration of the La Casita concessions with the ongoing mapping and
sampling across the El Tigre project area.

F-27

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE E  COMMITMENTS AND CONTINGENCIES

Litigation

As of June 30, 2007, the Company is not a party to ant legal
proceedings, nor are there any judgments against the Company. However, the
Company may be subject to legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.

Option Agreement

On May 15, 2005, the Company entered into an Option Agreement
with its Chief Geologist. Pursuant to the Option Agreement, the Company agreed
to issue 1,000,000 stock options to Chief Geologist. The exercise price of the
options is $0.001 per share, and shall expire 60 days after the termination of
the consulting agreement between the Company and COO. The grant and vesting of
the stock options is contingent upon the Company acquiring rights to a property
on which a gold deposit of at least 500,000 ounces of gold is proven. As of June
30, 2007, the Company has not acquired rights to properties as defined and the
stock options have not been granted or vested.

NOTE F  DISCONTINUED OPERATIONS

Aurum Financial Services, Inc.

In June 2006, the Companys Board of Directors authorized to
spin off one of its wholly-owned subsidiary, Aurum Financial Services, Inc.
(Aurum), by issuing to the Companys shareholders as of July 1, 2006 (Record
Date) one share of Aurum for every 10 shares of the Companys common stock
owned by the shareholders. Effective July 1, 2006, Aurum is formally spun off
and is no longer a subsidiary of the Company. Aurum was incorporated in June
2006, and had no operations prior to the second quarter of 2006. In accordance
with APB Opinion No. 30, Reporting the Results of Operations -- Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, the financial statements reflect
the operating results and balance sheet items of the discontinued operations,
Aurum, separately from continuing operations.

Aurum had no assets at December 31, 2006. During the second
quarter of 2006, the Company transferred $50,023 of cash to Aurum for working
capital purposes. Aurum incurred $22,128 of office expenses during the quarter
ended June 30, 2006. Prior to the spin-off, Aurum had $10,000 of prepaid
expenses and $17,895 of cash in bank.

The following summarizes the disposition of the Aurum:

Net assets disposed of
    $
    (27,895
    )Net loss on
      disposal of Aurum
    $
    (27,895
    )


F-28

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE F  DISCONTINUED OPERATIONS (Continued)

Aurum Financial Services, Inc. (Continued)

Operating results for the discontinued operations for the
period ended June 30, 2007 and 2006 and for the period from February 9, 2005
(date of inception) through June 30, 2007 were:

|                                                   |   |             |  |   |             |  |   | For the     |  
|-------------------------------------------------- | - | ----------- |  | - | ----------- |  | - | ----------- | -
|                                                   |   |             |  |   |             |  |   | from        |  
|                                                   |   |             |  |   |             |  |   | February 9, |  
|                                                   |   |             |  |   |             |  |   | 2005        |  
|                                                   |   | For the six |  |   | For the six |  |   | (date of    |  
|                                                   |   | months      |  |   | months      |  |   | inception)  |  
|                                                   |   | ended       |  |   | ended       |  |   | through     |  
|                                                   |   | June 30,    |  |   | June 30     |  |   | June 30,    |  
|                                                   |   | 2007        |  |   | 2006        |  |   | 2007        |  
|Revenue                                            | $ | -           |  | $ | -           |  | $ | -           |  
|Expenses                                           |   | -           |  |   | -           |  |   | 22,128      |  
|Net (loss) before tax                              |   | -           |  |   | -           |  |   | (22,128     | )
|Income tax provision (benefit)                     |   | -           |  |   | -           |  |   | -           |  
|Net loss                                           |   | -           |  |   | -           |  |   | (22,128     | )
|                                                   |   |             |  |   |             |  |   |             |  
|Net loss on the disposition of Aurum,
      before |   | -           |  |   | -           |  |   | (27,895     | )
|Income tax provision (benefit)                     |   | -           |  |   | -           |  |   | -           |  
|Loss on disposition of Aurum                       |   | -           |  |   | -           |  |   | (27,895     | )
|Loss on discontinued operations, net of tax        | $ | -           |  | $ | -           |  | $ | (50,023     | )

There were no depreciation and amortization expense included in
all period presented.

Subsequent to the spin-off of Aurum, the Company has agreed to
grant Aurum a loan of $125,000 as business start up costs and to promote their
activities. At December 31, 2006, the Company advanced $95,000 to Aurum. Aurum
has repaid the loan in full as of June 30, 2007. During the six months ended
June 30, 2007 the Company received loans of $300,000 from Aurum. The loan is
non-interest bearing and is due on demand. The Companys 3 directors have voting
controls of Aurum.

Stratos Gold Corporation

In September 2006, the Companys Board of Directors authorized
to spin off one of its wholly-owned subsidiary, Stratos Gold Corporation
(Stratos), by issuing to the Companys shareholders as of September 1, 2006
(Record Date) one share of Stratos for every 50 shares of the Companys common
stock owned by the shareholders. Effective September 1, 2006, Stratos is
formally spun off and is no longer a subsidiary of the Company. Stratos had no
operations prior to the spin-off in September 2006. During the six months ended
June 30, 2007 the Company received loans of $30,000 from Stratos. The loan is
non-interest bearing and is due on demand. The Companys 2 directors have voting
controls of Stratos.

F-29

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HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE F  DISCONTINUED OPERATIONS (Continued)

Tecton Corporation

In December 2006, the Companys Board of Directors authorized
to spin off Tecton Corporation (Tecton), by issuing to the Companys
shareholders as of December 1, 2006 (Record Date) one share of Tecton for
every 100 shares of the Companys common stock owned by the shareholders.
Effective December 1, 2006, Tecton is formally spun off and is no longer a
subsidiary of the Company. Tecton had no operations prior to the spin-off.
Subsequent to the spin-off of Tecton, the Company advanced Tecton working
capital of $50,000. During the six months ended June 30, 2007 the Company
received loans of $570,601 from Tecton. The loan is non-interest bearing and is
due on demand. The Companys 3 directors have voting controls of Tecton.

Sirius Corporation

On January 12, 2007, the Companys Board of Directors
authorized to spin off one of its wholly-owned subsidiary, Sirius Corporation
(Sirius), by issuing to the Companys shareholders as of January 12, 2007
(Record Date) one share of Sirius for every 100 shares of the Companys common
stock owned by the shareholders. Effective January 12, 2006, Sirius is formally
spun off and is no longer a subsidiary of the Company. Sirius had no operations
prior to the spin-off. Subsequent to the spin-off of Sirius, the Company
advanced Sirius working capital of 10,000. As of March 31, 2007 and December 31,
2006, advances to Sirius amounted $10,000 and $0, respectively. The advance is
non-interest bearing and is due on demand. The Companys 2 directors have voting
controls of Sirius. . Additionally, the Company acquired 1,000,000 common shares
of Sirius Corporation at $0.001 per share. This represents approximately 2% of
Siriuss total outstanding shares. The Company does not have the ability to
exercise significant influence over operating and financial policies of Sirius.
Considerable management judgment is necessary to estimate fair value of the
shares purchased. Sirius has minimal operations as of June 30, 2007 and future
development is highly uncertain, the Company has accordingly recorded a charge
of $1,000 for the impairment of the restricted stock purchased. During the six
months ended June 30, 2007 the Company received loans of $250,000 from Sirius.
The loan is non-interest bearing and is due on demand

Allegra Corporation

On January 12, 2007, the Companys Board of Directors
authorized to spin off one of its wholly-owned subsidiary, Allegra Corporation
(Allegra), by issuing to the Companys shareholders as of January 12, 2007
(Record Date) one share of Allegra for every 100 shares of the Companys
common stock owned by the shareholders. Effective January 12, 2007, Allegra is
formally spun off and is no longer a subsidiary of the Company. Allegra had no
operations prior to the spin-off. Subsequent to the spin-off of Allegra, the
Company acquired 500,000 common shares of Allegra at $0.001 per share. This
represents approximately 1% of Siriuss total outstanding shares. The Company
does not have the ability to exercise significant influence over operating and
financial policies of Allegra. Considerable management judgment is necessary to
estimate fair value of the shares purchased. Allegra has minimal operations as
of June 30, 2007 and future development is highly uncertain, the Company has
accordingly recorded a charge of $500 for the impairment of the restricted stock
purchased.

F-30

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007

NOTE F  DISCONTINUED OPERATIONS (Continued)

Hemis Philippines Corporation

During the first quarter of 2007, the Company management
decided to proceed with the plan of discontinuing operations of Hemis
Philippines Corporation. Substantially all assets of the Philippines subsidiary
were liquidated to pay off outstanding accounts payable and office expenses
incurred during the quarter. The financial statements reflect the operating
results and balance sheet items of the discontinued operations separately from
continuing operations. Prior years have been restated.

The following summarizes the assets and liabilities of
discontinued operations as of June 30, 2007 and December 31, 2006:

June 30,
    
    
    December2007
    
    
    2006Assets:Cash
    $
    -
    
    $
    350Leasehold Improvements
    
    -
    
    
    12,135Furniture & Fixtures
    
    -
    
    
    5,545Computer Equipment
    
    -
    
    
    6,112Automobile
    
    -
    
    
    6,319Accumulated Depreciation
    
    -
    
    
    ( 14,186
    )Total Assets
    $
    -
    
    $
    16,275Liabilities:Accounts payable and accrued liabilities
    $
    8,637
    
    $
    15,444Total Liabilities
    $
    8,637
    
    $
    15,444


During the first quarter of 2007 the Company sold the assets of
the Philippines subsidiary in exchange for net proceeds of $11,205. The assets
sold had a net book value of $15,925, accordingly the company accounted for
$4,720 of loss on disposal of the assets. The following summarizes the operating
results for the discontinued operations for the period end June 30, 2007 and
2006, and for the period from February 9, 2005 (date of inception) through June
30, 2007:

|                                 |   | For the six months |   |   | For the six months |  |   | For the period from |  
|-------------------------------- | - | ------------------ | - | - | ------------------ |  | - | ------------------- | -
|                                 |   | ended June 30,     |   |   | ended June 30,     |  |   | February 9,         |  
|                                 |   |                    |   |   |                    |  |   | of inception)       |  
|                                 |   |                    |   |   |                    |  |   | June 30, 2007       |  
|Revenue                          | $ | -                  |   | $ | -                  |  | $ | -                   |  
|Expenses                         |   | ( 4,748            | ) |   | -                  |  |   | (86,090             | )
|Loss on disposal of discontinued |   | ( 4,720            | ) |   | -                  |  |   | (4,720              | )
|Net (Loss)                       | $ | (9,468             | ) | $ | -                  |  | $ | (90,810             | )

F-31

---

HEMIS CORPORATION. (An exploration stage
company)
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) 
  JUNE 30, 2007007

NOTE G  GOING CONCERN MATTERS

The accompanying unaudited condensed financial statements have
been prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. As
shown in the accompanying unaudited condensed consolidated financial statements
for the period February 9, 2005 (date of inception) to June 30, 2007, the
Company accumulated losses of $15,672,309. The Companys current liabilities
exceeded its current assets by $1,091,649. However, the Company has generated no
revenues to date, has incurred operating expenses and has sustained losses.
These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.

The Company's existence is dependent upon management's ability
to develop profitable operations and resolve its liquidity problems. Management
anticipates the Company will attain profitable status and improve its liquidity
through the strategic acquisition of businesses and continued business
development, and additional equity investment in the Company. The accompanying
unaudited condensed consolidated financial statements do not include any
adjustments that might result should the Company be unable to continue as a
going concern.

In order to improve the Companys liquidity, the Company is
actively pursuing additional equity financing through discussions with
investment bankers and private investors. There can be no assurance the Company
will be successful in its effort to secure additional equity financing.

If operations and cash flows continue to improve through these
efforts, management believes that the Company can continue to operate. However,
no assurance can be given that managements actions will result in profitable
operations or the resolution of its liquidity problems.

NOTE H - SUBSEQUENT EVENTS

Subsequent to the date of the financial statements, the Company
issued 315,000 shares of common stock in exchange for common stock subscribed
during the six months ended June 30, 2007 (Note B). The Company also issued an
aggregate of 75,000 shares of common stock to Corex Gold Corporation pursuant to
the Letter Agreement (Note E). The Company issued an aggregate of 100,000 shares
of common stock to an investor pursuant to a settlement agreement. Additionally,
the Company issued an aggregate of 400,000 shares of common stock to consultants
in exchange for services rendered.

F-32

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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION/ PLAN OF OPERATIONS

Forward Looking Statements

This quarterly report on Form 10-QSB contains forward-looking
statements that involve risks and uncertainties. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology including, "could" "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential" and the negative of these terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested in this report.

Introduction

Hemis Corporation (we, us, Hemis) was incorporated as a
Nevada company on February 9, 2005. We have been engaged in the acquisition,
exploration and development of mineral properties since our inception. We
currently have one active wholly-owned subsidiaries, Hemis Gold SA de CV which
was incorporated in Mexico in May 2005. We plan to use the Mexican subsidiary to
carry out exploration activities in Mexico.

Overview

We are engaged in the acquisition and exploration of mineral
properties in La Zacatecas, Mexico; Sonora, Mexico; British Columbia, Canada;
and Alaska, U.S. Our plan of operations for the next twelve months beginning
August 1, 2007 is to conduct exploration of our mineral properties in Mexico,
Canada and the U.S.

We have only recently begun our current operations and we have
not yet earned any revenues and have had operational losses to date, as well as
an accumulated deficit. From our inception on February 9, 2005 until June 30,
2007 we incurred a total comprehensive loss of $15,684,150.

We are an exploration stage company. Our most advanced projects
are at the exploration stage and there is no assurance that any of our mining
claims contain a commercially viable ore body. We plan to undertake further
exploration of our properties. We anticipate that we will require additional
financing of approximately $10,054,000 in order to pursue full exploration of
these claims. We do not have sufficient financing to undertake full exploration
of our mineral claims at present and there is no assurance that we will be able
to obtain the necessary financing.

There is no assurance that a commercially viable mineral
deposit exists on any of our mineral properties. Further exploration beyond the
scope of our planned exploration activities will be required before a final
evaluation as to the economic and legal feasibility of mining of any of our
properties is determined. There is no assurance that further exploration will
result in a final evaluation that a commercially viable mineral deposit exists
on any of our mineral properties.

3

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Plan of Operation

We are engaged in the acquisition and exploration of mineral
properties in Zacatecas, Mexico, Sonora, Mexico, British Columbia, Canada and
Alaska, U.S.A. We hold options to acquire interests in five mineral concessions
on properties in Mexico and we hold the rights to acquire various offshore
prospect permitting applications in Alaska, and some of the Alaska applications
have been granted. We also hold the rights to acquire interests in two mineral
claims in Canada as described below:

Name of Property
    Location
    Nature of InterestSanta Rita Property
    La Zacatecas, Mexico
    Option to acquire a 49% interest (of Corex
      Gold's interest) in mining rightsEl Tigre Property
    Sonora, Mexico
    Option to acquire a 67.5% interest in mining
      rightsPorvenir Property
    Sonora, Mexico
    Option to acquire a 67.5% interest in mining
      rightsLa Centela Property
    Sonora, Mexico
    Options to acquire up to a 75% interest in
      mining rightsLa Casita Property
    Sonora, Mexico
    Exclusive right to complete our application to
      acquire a 100% interest in mining rightsAnchor Point Gold Project
    Alaska, US
    Rights to acquire various offshore prospecting
      permit applications and a non- exclusive license of geologic informationWolfe Creek and Covenant and Covenant Claims
    British Columbia, Canada
    Option to acquire 100% interest in mining
      rights of two properties


Our plan of operation for the next twelve months beginning
August 1, 2007 is to carry out exploration of our mineral properties in Mexico
and Canada and to get approval for the offshore prospecting permit applications
which relate to our five potential exploration project locations in Alaska. We
intend to primarily explore for gold and molybdenum, but if we discover that any
of our mineral properties hold potential for other minerals that our management
determines are worth exploring further, then we will explore for those other
minerals. All of our exploration programs are preliminary in nature in that
their completion will not result in a determination that any of our properties
contains commercially exploitable quantities of mineralization. Our management
estimates that it will cost us approximately $7,000,000 in exploration expenses
and take us until summer of 2009 to determine if the mineral properties on which
we have options, do have commercially exploitable quantities of mineralization.

Our exploration programs will be directed by our management and
will be supervised by Dr. Doug Oliver, Vice-President Operations. We will engage
contractors to carry out our exploration programs under Dr. Olivers
supervision. Contractors that we plan to engage include project geologists,
geochemical sampling crews and drilling companies, each according to the
specific

4

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exploration program on each property. We plan to solicit bids
from drilling companies prior to selecting any drilling company to complete a
drilling program. We anticipate paying normal industry rates for core drilling.

We plan to continue exploration of our mineral claims so long
as the results of the geological exploration indicate that further exploration
of our mineral claims is recommended, and we are able to obtain the additional
financing necessary to enable us to continue exploration. All exploration
activities on our mineral claims are presently preliminary exploration
activities. Advanced exploration activities, including the completion of
comprehensive drilling programs, will not be necessary before we are able to
complete any feasibility studies on any of our mineral properties. If our
exploration activities result in an indication that our mineral claims contain
potentially commercial exploitable quantities of gold, then we would attempt to
complete feasibility studies on the property to assess whether commercial
exploitation of the property would be commercially feasible. There is no
assurance that commercial exploitation of our mineral claims would be
commercially feasible even if our initial exploration programs show evidence of
gold mineralization.

Our planned exploration expenditures for the next twelve months
(beginning August 1, 2007) on our mineral properties, together with amounts we
expect to spend on administrative costs are summarized as follows:

Description of Expense
    AmountExploration of the joint El Tigre Gold Project (the joint
      El Tigre, Porvenir, La Centela and La Casita Claims)
    $1,595,000Payment towards acquisition of La Centela mining rights
    $250,000Payment towards acquisition of rights in respect of the
      Cook Inlet Permit Applications
    $ 50,000Exploration of the Anchor Point Gold Project, Alaska
    $1,000,000Payment towards acquisition of Santa Rita mining rights
    $ 600,000Payment towards acquisition of Wolfe Creek and Covenant
      mining rights
    $ 333,000Exploration of the Wolfe Creek and Covenant mining rights
    $ 500,000Obtaining interests in other mining rights, including La
      Casita
    $ 2,000,000General and Administrative Expenses
    $ 4,000,000Total
    $10,328,000


The general and administrative expenses for the year will
consist primarily of professional fees for the audit and legal work relating to
our regulatory filings throughout the year, as well as transfer agent fees,
management fees, investor relations and general office expenses.

5

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As at June 30, 2007, we had approximately $274,054 in cash or
cash equivalents. Based on our planned expenditures as outlined above, we
require additional capital of approximately $10,054,000 to proceed with our plan
of operations over the next twelve months. We require additional financing in
order to pursue our exploration programs beyond the preliminary exploration
programs for our mineral properties that are outlined above. If we achieve less
than the full amount of financing that we require, we will scale back our
exploration programs on our mineral properties and will proceed with scaled back
exploration plans based on our available financial resources.

From the date of this quarterly report for the following 30
months, we anticipate that we will not generate any revenues. Accordingly, we
will be required to obtain additional financing in order to continue our plan of
operations. We believe that debt financing will not be an alternative for
funding additional phases of exploration as we do not have tangible assets to
secure any debt financing. We anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. However, we do not
have any financing arranged and we cannot provide investors with any assurance
that we will be able to raise sufficient funding from the sale of our common
stock to fund our exploration programs. In the absence of such financing, we
will not be able to continue exploration of our mineral claims. Even if we are
successful in obtaining equity financing to fund our exploration programs, there
is no assurance that we will obtain the funding necessary to pursue any advanced
exploration of our mineral claims following the completion of preliminary
exploration. If we do not continue to obtain additional financing, we will be
forced to abandon our properties and our plan of operations.

Our specific exploration plans for each of our mineral
properties, together with the estimated time periods and our estimated budgets
for our exploration programs, are described below:

Santa Rita

On January 29, 2007 we signed a 2007 Option Agreement with
Corex Gold relating to the Santa Rita project. This agreement changed our
interest in the Santa Rita project from a 49% interest in the property itself,
to a 49% interest in whatever interest Corex Gold has in the property. Therefore
we will no longer be carrying out exploration of the property and will not incur
any more exploration expenses. Instead, we will need to make six payments to
Corex Gold as detailed below in order to exercise our option.

Due Date
    Payment
    Common SharesJanuary 31, 2007
    $200,000 (paid in January 2007)
    25,000 (Issued in October, 2006)July 31, 2007
    $200,000 (Corex has agreed to 14
      day extension of payment)
    75,000 (Issued July 23, 2007)January 31, 2008
    $200,000
    50,000July 31, 2008
    $200,000
    50,000January 31, 2009
    $200,000Total
    $1,000,000
    200,000


El Tigre, Porvenir and La Centela Claims

On December 31, 2005, our wholly owned subsidiary, Hemis Gold
S.A. do C.V., entered into an option agreement with Jose Quiros Soto, Loreto
Careaga Galaz, Viuda de Rascon and Rosa Maria Burgos Robles to acquire a 67.5%
interest in the El Tigre and Porvenir properties.

6

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If we incur $200,000 in exploration expenditures within 548
days (18 months) from the date of the agreement, January 23, 2006, we will
acquire a 67.5% interest in the El Tigre concession and the Porvenir concession
mineral claims. These expenditures were paid in full by the due date meaning
that we have now acquired a 7.5% interest in these claims.

On September 7, 2006 we entered into a binding letter of intent
agreement with Electrum Capital, Inc. and Snra. Maria de Los Angeles Valverde
Guzman (the "Optionors") whereby we obtained options to acquire up to 75% of the
La Centela mineral claims. The La Centela option agreement consists of two
parts; an option to acquire the first 70% of the mining rights and an option for
a further 5% of the mining rights. To acquire the first 70% of the mining rights
we must pay $500,000 and issue 500,000 of our common shares to the mineral
rights owner, spend at least $2,000,000 in exploration expenses and make a final
share payment of one share for every ounce of gold we identify, if we identify
any gold, to a maximum of 10,000,000 shares. If we exercise our option to
acquire the first 70% of the mineral rights, we may then acquire a further 5% of
the total claim by making a cash payment of $1,000,000.

To date we have carried out exploratory work on the El Tigre
Gold Project (the joint El Tigre, Porvenir and La Centela Claims) and have
discovered molybdenum mineralization veins in three locations on the La Centela
concessions.

Our plan of exploration for the joint El Tigre Gold Project is
as follows:

Description of Phase of Exploration
    Description of Exploration
      Work RequiredCommence core drilling
    We commenced core drilling
      operations in April 2007 using Cabo Drilling. Initial drilling will be on
      three of the five known gold-bearing breccia zones. We are planning on
      eight holes averaging 200 meters each. Estimated time for completion is
      two months. Projected cost for this phase is $1,200,000.Test Hole
    Drilling will then shift to an
      initial deep hole on the El Aliso Moly target. This will be a single test
      hole of approximately 1,000 meters. This hole will give us time to get
      assays and evaluate the initial round of drilling at El Tigre. The time to
      drill this hole is estimated at approximately two months. Projected cost
      for this phase is $185,000.Follow up drilling
    A round of follow-up drilling will take place
      to further test and expand results from the first round of drilling at El
      Tigre. Target selection will be based on either favorable results from the
      first round, untested breccia zones, and/or target areas found in ongoing
      sampling and mapping. This second round of drilling is currently scheduled
      at five holes averaging 250 meters each but may be expanded depending on
      results from the first round. Estimated time of completion is
      approximately six weeks. Projected cost for this phase is $180,000.On-going sampling and mapping
    We are also currently engaged in
      on-going sampling and mapping at El Tigre. The goal is to generate more
      targets while we are drilling so as to sustain the project. Projected cost
      for continued exploration is $30,000.


7

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La Casita

La Casita is a mineral exploration concession which is located
close to our El Tigre, Porvenir and La Centela concessions. On April 19, 2007 we
won a raffle to determine which of several concurrent applicants would be able
to proceed with an application to obtain a mining concession on La Casita. The
concession will be reserved for us by the Mexican government pending our
application and if all of the formalities are complied with (and all the correct
technical information is supplied), we anticipate that we will be granted a 100%
interest in the La Casita mineral concession within two to six months. We aim to
integrate exploration of the La Casita concessions with the ongoing mapping and
sampling across the El Tigre project area.

Anchor Point Gold Project

On January 8, 2007 we entered into an agreement with Aspen
Exploration Corporation pursuant to which Aspen assigned us State of Alaska
offshore prospecting permit applications, together with a non-exclusive license
of all of Aspens right, title and interests to all maps, aeromagnetic surveys
and geologic information developed by Aspen in the Cook Inlet, Alaska (the
Anchor Point Gold Project).

As at August 3, 2007, only some of the offshore prospecting
permit applications have been approved. Whilst we wait for approval on the
remaining permits, we are involved in reviewing the aeromag data and determining
where the sampling program is to take place. We have also contracted Earthfield
Technologies of Houston to process newer aeromagnetic data covering the Lower
Cook Inlet. We plan to conduct an oceanographic survey over the key areas of
interest to get data on bathymetry, sediment stratigraphy and local magnetic
variations. We have retained Entrix, Inc. to assist us in getting the necessary
state and federal permits. We anticipate starting our exploration program on the
Anchor Point Gold Project in the middle of August 2007.

We will persist in applying for the offshore prospecting
permits and if we are successful in obtaining them, we have agreed with Aspen on
the following plan of operations, which we shall use as our basis for
exploration, development and mining of all ores, minerals, and mineral resources
in the area:

- In the first year, we will acquire additional aeromagnetic data in the Cook
  Inlet, Alaska, and apply for additional State of Alaska offshore prospecting
  permits or federal offshore exploration and mining rights.
- In the second and subsequent years, we will obtain permits and conduct
  exploration of the area.
- If commercial feasibility is demonstrated, we will acquire the equipment
  needed to economically produce any identified deposits.

Wolfe Creek and Covenant Properties

On March 13, 2007 we entered into an option agreement with
Stacs GmbH whereby we acquired an option to purchase a 100% mining rights to the
Wolfe Creek and Covenant mineral concessions in British Columbia, Canada,
subject to a 3% royalty.

8

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Over the next 36 months, we plan to spend approximately
$1,000,000 on mapping, re-sampling, relocation, geological, geochemical and
geophysical surveys, and trenching. Subsequent drilling will require some
remediation work. We are still in the early stages of developing our full
exploration plan on this property, and we anticipate that we will begin
exploration of this property in October 2007. We plan on spending approximately
$500,000 over the next 12 months in exploration of the Wolfe Creek and Covenant
claims.

Our exploration plans for all our mineral interests will be
continually evaluated and modified as exploration results become available.
Modifications to our plans will be based on many factors, including: results of
exploration, assessment of data, weather conditions, exploration costs, and the
price of gold and available capital. Further, the extent of our exploration
programs that we undertake will be dependent upon the amount of financing
available to us.

Product Research and Development

We do not anticipate spending any material amounts in
connection with product research and development activities during the next
twelve months.

Acquisition of Plant and Equipment and Other Assets

Apart from our interests in the mineral concessions, we do not
anticipate the sale or acquisition of any material properties, plant or
equipment during the next twelve months. Any acquisitions are subject to
obtaining additional financing.

Number of Employees

As of June 30, 2007, our Chief Executive Officer our Chief
Financial Officer work as part time consultants, each contributing approximately
40% of their time to us. We have five administrative assistants in our Swiss
office and we employ three geologists on a part time basis. We also engage
independent contractors in the areas of marketing, accounting, bookkeeping,
business and financial consulting and legal services. In order for us to attract
and retain quality personnel, we anticipate we will have to offer competitive
salaries to future employees. We anticipate that it may become desirable to add
additional full and part time employees to discharge certain critical functions
during the next twelve months. This projected increase in personnel is dependent
upon our ability to generate revenues and obtain sources of financing. There is
no guarantee that we will be successful in raising the funds required or
generating revenues sufficient to fund the proposed increase in the number of
employees. As we continue to expand, we will incur additional cost for
personnel.

On June 1, 2007 we entered into a consulting agreement with
William Snoddy pursuant to which Mr. Snoddy will provide geologist consulting
services in exchange for compensation of $10,000 per month. In particular, Mr.
Snoddy will assist us in the identification and evaluation of exploration
targets, including providing geological services required to acquire, advance,
and develop mineral exploration properties; and providing general business
negotiation advice as required. Ordinarily, the agreement may be terminated by
either party on 14 days written notice.

9

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Results of Operations

Our results of operations are presented below:

Three Months Ended June 30, 2007
    Three Months Ended June 30, 2006
    Period from February 9, 2005
      (inception) to June 30, 2007Costs and Expenses:General and Administrative
    $4,495,094
    $800,008
    $15,373,726Depreciation
    5,477
    12,111
    16,645Total Operating Expense
    4,500,571
    812,119
    15,390,371Loss from Operations
    (4,500,571)
    (812,119)
    (15,390,371)Loss on put agreement
    -
    -
    (141,105)Loss on discontinued operations
    -
    (22,128)
    (140,833)Net Loss
    (4,500,571)
    (834,247)
    (15,672,309)Loss per common share (basic and assuming
      dilution)
    $
      (0.06)
    $
      (0.07)Weighted average common shares for
      computation
    70,753,576
    12,681,489


Since our inception on February 9, 2005, we have never
generated any revenues. Since our inception on February 9, 2005 to June 30,
2007, we incurred net loss of $15,672,309. We anticipate that we will not earn
any revenues during the current fiscal year or in the following 30 months from
the date of this report as we are presently engaged in the exploration of our
mineral properties.

For the three months ended June 30, 2007 we incurred net loss
of $4,500,571 compared to our net loss of $834,247 for the same period in 2006.
An increase of $3,666,324 in net loss was mainly due to the increase in our day
to day operating costs. For the six months ended June 30, 2007, we incurred net
loss of $7,606,367. Our net loss per share was $0.06 and $0.12 respectively for
the three months and six months ended June 30, 2007.

For the three months ended June 30, 2007 our total operating
expenses were $4,500,571 compared to $812,119 for the three months ended June
30, 2006. The increase of $3,688,452 in operating expenses is primarily due to
our increased day to day operation activities for the three months ended June
30, 2007 and an associated increase in professional fees including accounting,
legal and other consulting fees, increased travel and entertainment expenses,
and increased mineral and exploration costs. We have experienced significantly
more business activities in relation to our acquisition of mineral interests in
the 3 months in 2007 as compared with the 3 months of operations in 2006. Our
total operating expenses increased $5,529,307 from $2,046,803 for the six months
ended June 30, 2006 to $7,576,110 for the six months ended June 30, 2007. Since
our inception to June 30, 2007 we incurred $15,390,371 in total operating
expenses.

Our general and administrative expenses from February 9, 2005
(date of inception) to June 30, 2007 were $15,373,726, including $683,503 in
professional fees, $7,476,371 in consulting fees, $609,000 in management fees,
and $6,504,852 in other administrative expenses.

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For the three months ended June 30, 2007, our general and administrative
  fees were $4,495,094, including $182,808 in professional fees, $2,780,311 in
  consulting fees, $66,000 in management fees, and $1,365,975 in other administrative
  expenses. Compared to the same period in 2006, our general and administrative
  fees increased $3,695,086, mainly because we had additional legal and auditing
  services and increased expenses related to our acquisition of mineral interests.
  For the six months ended June 30, 2007, our general and administrative fees
  were $7,566,890, including $276,968 in professional fees, $4,446,662 in consulting
  fees, $156,000 in management fees, and $2,687,260 in other administrative expenses.
  For the six months ended June 30, 2006, we incurred $2,034,015 in general and
  administrative fees. Our other administrative expenses consist of bank charges,
  filing fees, payroll, investor relations fees, marketing expenses, stock based
  compensation, travel, meals and entertainment, rent, foreign exchange, office
  maintenance, communication expenses (cellular, internet, fax, and telephone),
  courier, postage costs and office supplies, and exploration and mineral costs.
  Our professional fees include legal, accounting and auditing fess.

Total depreciation expense was $16,645 from February 9, 2005
  (date of inception) to June 30, 2007. Our depreciation decreased $6,634 or 55%
  to $5,477 for the three months ended June 30, 2007 from $12,111 for the same
  period in 2006. Our depreciation decreased $3,568 or 28% to $9,220 for the six
  months ended June 30, 2007 from $12,788 for the same period in 2006. The decrease
  in depreciation was mainly because certain assets have depreciated fully during
  the fiscal year 2007.

Liquidity and Capital Resources

As of June 30, 2007, we had cash and cash equivalents of $274,054
  and a working capital deficit of $1,091,649. Our accumulated deficit was $15,672,309
  as at June 30, 2007. Our net loss of $15,672,309 from February 9, 2005 (date
  of inception) to June 30, 2007 was mainly funded by our equity financing and
  the advance by related parties. During the six month ended June 30, 2007, we
  raised $809,449 from the sale of our common stock. The decrease in cash and
  cash equivalent for the six months ended June 30, 2007 was $2,163,927.

We used net cash of $55,032 in investing activities during the
  six months ended June 30, 2007. We used net cash of $2,553,768 in operating
  activities for the six months ended June 30, 2007. We received net cash of $456,658
  from financing activities during the six months ended June 30, 2007. During
  the six months ended June 30, 2007, our monthly cash requirement was approximately
  $434,742 in operating and investing activities. As of June 30, 2007, we had
  cash and cash equivalent of $274,054, which will not cover our costs even for
  one month according to our current monthly burn rate.

We expect to require approximately an additional $10,054,000 in
financing to continue our planned operations for the next year (from August 1,
2007). We anticipate that after August 2007 our monthly expenses will increase
to $837,800, which includes $504,500 monthly for general and administrative
expenses and $333,300 monthly for the proposed acquisition and exploration
costs.

The Companys independent registered public accounting firm has
stated in their report included in our December 31, 2006 Form 10-KSB, that our
recurring losses raise substantial doubts about our ability to continue as a
going concern, and we are dependent upon management's ability to develop
profitable operations.

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If we are unable to achieve the necessary additional financing,
then we plan to reduce the amounts that we spend on our exploration activities
and administrative expenses in order to be within the amount of capital
resources that are available to us. Specifically, we anticipate that we would
defer drilling programs pending our obtaining additional financing. Given our
plan to scale back our operations if we do not achieve additional financing, we
anticipate that our current cash and working capital will be sufficient to
enable us to sustain our operations and our interests in our mineral properties
for the next twelve months.

Future Financings

We will require additional financing in order to proceed with
the exploration of our mineral properties. We plan to complete private placement
sales of our common stock in order to raise the funds necessary to pursue our
plan of operations. Issuances of additional shares will result in dilution to
our existing shareholders. We currently do not have any arrangements in place
for the completion of any private placement financings and there is no assurance
that we will be successful in completing any private placement financings.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

Inflation

The effect of inflation on our revenue and operating results
was not significant.

Audit Committee

The functions of the audit committee are currently carried out
by our Board of Directors. Our Board of Directors has determined that we do not
have an audit committee financial expert on our Board of Directors carrying out
the duties of the audit committee. Our Board of Directors has determined that
the cost of hiring a financial expert to act as a director of Hemis and to be a
member of the audit committee or otherwise perform audit committee functions
outweighs the benefits of having a financial expert on the audit committee.

ITEM 3. CONTROL AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

Our Chief Executive Officer and Chief Financial Officer
evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e)
and Rule 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act)
as of a date within 90 days before the filing date of this report and has
concluded that as of the evaluation date, our disclosure controls and procedures
are effective to ensure that information we are required to disclose in reports
that we file or submit 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.

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(b) Changes in internal controls

Subsequent to the date of their evaluation, there were no
changes in our internal controls over financial reporting or in other factors
that could significantly affect these controls. There were no significant
deficiencies or material weaknesses in our internal controls so no corrective
actions were taken.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not aware of any pending or threatened legal proceedings
which involve us or any of our properties or subsidiaries.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

During the 2nd quarter of 2007, we issued
unregistered securities as follows:

- On April 10, 2007 we issued an aggregate of 12,500 shares to our
  geologist, Charles Reed, for services between January 1, 2007 and March 31,
  2007. The shares were valued at $1.40 per share, which was the closing price
  of our stock on the OTC Bulletin Board on the date of issuance.
- On April 13, 2007 we issued 14,400 shares of our common stock to a non-US
  investor for cash at $1.00 per share. The closing price of our common stock on
  the OTC Bulletin Board on the date of issuance was $1.40 per share.
- On April 26, 2007 we issued 20,000 common shares to Casey Danielson as a
  one off bonus payment, for services provided in April 2007. The shares were
  valued at $0.77 per share, which was the closing price of our common stock on
  the OTC Bulletin Board on the date of issuance.
- In May 2007, we issued an aggregate of 17,500 shares of common stock at
  $1.00 per share in exchange for proceeds of $15,750, net of costs and fees. We
  incurred commission costs of $1,750 in connection with the issuance of these
  common shares.
- In May 2007, we issued an aggregate of 56,250 shares of common stock at
  $0.80 per share in exchange for proceeds of $41,000, net of costs and fees.
- In May 2007, the Company issued 500,000 shares of common stock to a
  consultant in exchange for services rendered and to be rendered through April
  10, 2008. The common shares issued were valued at $1.05 per share, which was
  estimated to be approximate the fair value of the Companys common shares
  during the period covered by the consulting agreement.
- In June 2007, we issued an aggregate of 394,780 shares of common stock to
  a consultant in exchange for services rendered. The common shares issued were
  valued at $.80 per share, which was estimated to be approximate the fair value
  of our common shares during the period covered by the consulting agreement.
- In June 2007 we issued an aggregate of 112,500 shares of common stock at
  $0.80 per share in exchange for proceeds of $81,000, net of costs and fees.

These transactions were exempt from registration pursuant to
Regulation S or Section 4(2) of the Securities Act of 1933.

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We completed the offerings of the common stock pursuant to Rule
903 of Regulation S of the Securities Act on the basis that the sale of the
common stock was completed in an "offshore transaction", as defined in Rule
902(h) of Regulation S. We did not engage in any directed selling efforts, as
defined in Regulation S, in the United States in connection with the sale of the
units. Each investor was not a US person, as defined in Regulation S, and was
not acquiring the shares for the account or benefit of a US person.

Our reliance upon the exemption under Section 4(2) of the
Securities Act of 1933 was based on the fact that the issuance of these shares
did not involve a public offering. The offering was not a "public offering" as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of shares
offered. We did not undertake an offering in which we sold a high number of
shares to a high number of investors. No general solicitation was used, no
commission or other remuneration was paid in connection with these transactions,
and no underwriter participated. Based on an analysis of the above factors,
these transactions were effected in reliance on the exemption from registration
provided in Section 4(2) of the Securities Act for transactions not involving
any public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION:

None

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ITEM 6. EXHIBITS

|Exhibit | Exhibit                                                                                                                                                          
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                      
|        |                                                                                                                                                                  
|10.1    | Consulting
        Agreement with William Snoddy                                                                                                                 
|        |                                                                                                                                                                  
|31.1    | Certification
        of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                           
|        |                                                                                                                                                                  
|31.2    | Certification
        of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                           
|        |                                                                                                                                                                  
|32.1    | Certification
        of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|        |                                                                                                                                                                  
|32.2    | Certification
        of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                      | Hemis Corporation                           
|--------------------- | --------------------------------------------
|                      | (Registrant)                                
|                      |                                             
|                      | /s/ Norman Meier                            
|Date: August 14, 2007 | Norman Meier                                
|                      | Director, President, Chief Executive Officer
|                      |                                             
|                      | /s/ Bruno Weiss                             
|Date: August14, 2007  | Bruno Weiss                                 
|                      | Director, Chief Financial Officer           

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