UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-K
 
 (Mark
One)
 x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES   EXCHANGE
      ACT OF 1934For
      the fiscal year ended December 31,
      2008
  OR
 
 o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE
      ACT OF 1934For
      the transition period
  from_______________to_______________
  Commission
file number: 001-33516
 
 Apex
Bioventures Acquisition Corporation
 (Exact
Name of Registrant as Specified in its Charter)
 
 Delaware
                      (State
      or other jurisdiction
                      of
      incorporation or organization)
                    20-4997725
                      (I.R.S.
      Employer Identification No.)18
      Farm Lane
                      Hillsborough,
      California
                      (Address
      of principal executive offices)
                    94010
                      (Zip
      Code)
  Registrant’s
telephone number, including area code (650) 344-3029
 
 Securities
registered pursuant to Section 12(b) of the Exchange Act:
  Title of each class
                
                Name of each exchange on which registeredCommon
      Stock, $.0001 Par Value Per Share
                
                NYSE
      AmexCommon
      Stock Purchase Warrants
                
                NYSE
      AmexUnits
      consisting of one share of Common Stock and one Warrant
                
                NYSE
      Amex
  Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.   YesoNox
  
  Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Exchange Act.   YesoNox
  Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. YesxNoo
  Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.   YesxNoo
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
  Large accelerated fileroAccelerated fileroNon-accelerated fileroSmaller reporting companyx
  Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesxNoo
  The
aggregate market value of the outstanding common stock, other than shares held
by persons who may be deemed affiliates of the registrant, computed by reference
to the closing sales price for the Registrant’s Common Stock on June 30, 2008
(the last business day of the registrant’s most recently completed second
quarter), as reported on the NYSE Amex, was approximately $64,546,300. As of
March 23, 2009, there were 10,781,250 shares of common stock, par value $.0001
per share, of the registrant outstanding.
  2
  DOCUMENTS
INCORPORATED BY REFERENCE
  None.
  3
  TABLE
OF CONTENTS
 
 PART
      I
                      
                      
                      
                      6ITEM
      1
                      BUSINESS
                      
                      
                      6ITEM
      1A.
                      RISK
      FACTORS
                      
                      
                      8ITEM
      1B.
                      UNRESOLVED
      STAFF COMMENTS
                      
                      
                      10ITEM
      2
                      PROPERTIES
                      
                      
                      10ITEM
      3
                      LEGAL
      PROCEEDINGS
                      
                      
                      10ITEM
      4
                      SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
                      
                      
                      10PART
      II
                      
                      
                      
                      10ITEM
      5
                      MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
                      
                      
                      10ITEM
      6
                      SELECTED
      FINANCIAL DATA
                      
                      
                      12ITEM
      7
                      MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                      
                      
                      12ITEM
      7A.
                      QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
                      
                      
                      13ITEM
      8
                      FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
                      
                      
                      13ITEM
      9
                      CHANGES
      IN AND DISCLOSURE DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
                      
                      
                      13ITEM
      9A.
                      CONTROLS
      AND PROCEDURES.
                      
                      
                      13ITEM
      9B.
                      OTHER
      INFORMATION
                      
                      
                      14PART
      III
                      
                      
                      
                      15ITEM
      10
                      DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
                      
                      
                      15ITEM
      11
                      EXECUTIVE
      COMPENSATION
                      
                      
                      18ITEM
      12
                      SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
                      
                      
                      18ITEM
      13
                      CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
                      
                      
                      20ITEM
      14
                      PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
                      
                      
                      21PART
      IV
                      
                      
                      
                      23ITEM
      15
                      EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES
                      
                      
                      23
  4
  CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
  The
statements contained in this Annual Report on Form 10-K that are not purely
historical are forward-looking statements. Our forward-looking statements
include, but are not limited to, statements regarding our or our management’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In
addition, any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would” and similar
expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Forward-looking
statements in this Annual Report on Form 10-K may include, for example,
statements about:
  ·
              Business conditions in the U.S.
      and abroad;
  ·
              Changing interpretations of
      generally accepted accounting
principles;
  ·
              Outcomes of government reviews
      and continued compliance with government
    regulations;
  ·
              Inquiries and investigations and
      related litigation; and
  ·
              General economic
      conditions.
  The
forward-looking statements contained in this Annual Report on Form 10-K are
based on our current expectations and beliefs concerning future developments and
their potential effects on us. There can be no assurance that future
developments affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond our control) or other assumptions that may cause actual results
or performance to be materially different from those expressed or implied by
these forward-looking statements. These risks and uncertainties include, but are
not limited to, those factors described under the heading “Risk Factors.” Should
one or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under
applicable securities laws and/or if and when management knows or has a
reasonable basis on which to conclude that previously disclosed projections are
no longer reasonably attainable.
  5
  PART I
  Item 1    BUSINESS
  Introduction
  Apex
Bioventures Acquisition Corporation (the “Company”, “Apex”, “we”, or “us”) is a
blank check company organized under the laws of the State of Delaware on June 1,
2006. We were formed to acquire, through a merger, capital stock exchange, asset
acquisition or other similar business combination, one or more domestic or
international assets or an operating business in the healthcare industry, which
may or may not constitute a business combination for accounting purposes (a
“business combination”). To date, our efforts have been limited to
organizational activities, our initial public offering and the search for a
suitable business combination.  As of the date of this filing, we have
not acquired any business operations and we have no operations generating
revenue.  On March 4, 2009, our Board of Directors determined that the
Company will not consummate a business combination within the time frame
required by our Second Amended and Restated Certificate of Incorporation and
accordingly, approved the dissolution and liquidation of the Company, subject to
approval by the Company’s stockholders.
  Our
executive offices are located at 18 Farm Lane, Hillsborough California, 94010,
and our telephone number at that location is (650) 344-3029. We do not currently
have a website and consequently do not make available materials we file with or
furnish to the Securities and Exchange Commission. We will provide electronic or
paper copies of such materials free of charge upon request.
  Recent
Developments
 
 The
registration statement for our initial public offering (the “Public Offering”)
was declared effective June 7, 2007. We consummated the Public Offering on June
13, 2007 and received net proceeds of approximately $65,300,000, including
$1,800,000 of proceeds from the private placement (the “Private Placement”) sale
of 1,800,000 insider warrants to our stockholders prior to the Public Offering
(our “Initial Stockholders”).   On June 8, 2007, our units
commenced trading on the NYSE Amex (formerly the American Stock Exchange) under
the symbol “PEX.U”. On June 20, 2007, our common stock and warrants commenced
trading separately on the NYSE Amex under the symbols “PEX” and “PEX.WS”,
respectively.  The net proceeds of $65,300,000 (plus an additional
$2,070,000 attributable to a deferred underwriters’ discount) were placed in a
trust account (the “Trust Account”) to be used in connection with a business
combination or to be returned to the Company’s public stockholders if a business
combination was not completed within the time frame set forth in our Second
Amended and Restated Certificate of Incorporation.    Our
Second Amended and Restated Certificate of Incorporation provides that we will
continue in existence only until 18 months from the date of the consummation of
the Public Offering, or 24 months from the consummation of the Public Offering
if a letter of intent or definitive agreement has been executed within 18 months
after the consummation of the Public Offering. If we do not complete a business
combination by such date, our corporate existence will cease and we will
dissolve and liquidate for the purposes of winding up our
affairs.
 
 The
remaining net proceeds (not held in the Trust Account), along with up to
$1,600,000 in interest income net of taxes payable on such interest, have been
used to pay for business, legal, and accounting due diligence on prospective
acquisitions, continuing general and administrative expenses, and negotiation of
potential business combinations. As of February 28, 2009, the amount held
in the Trust Account, including $2,070,000 of underwriters’ deferred discounts
and commissions was approximately $67,674,226.
 
 The
placing of funds in the Trust Account may not protect those funds from third
party claims against us. Although we have sought, and will continue to seek, to
have all vendors, prospective target businesses and other entities we engage,
execute agreements waiving any right, title, interest or claim of any kind in or
to any monies held in the Trust Account, there is no guarantee that all parties
with which we do business will execute such agreements. Our Initial Stockholders
have agreed that they will be liable, on a joint and several basis, to cover
claims made by such third parties, but only if, and to the extent, the claims
reduce the amounts in the Trust Account available for payment to our public
stockholders in the event of a liquidation and the claims are made by a vendor
or service provider for services rendered, or products sold, to us or by a
prospective acquisition target. However, our Initial Stockholders will not have
any personal liability as to any claimed amounts owed to a third party who
executed a waiver (including a prospective acquisition target) or the
underwriters. We cannot assure you, however, that the Initial Stockholders will
be able to satisfy those obligations.
 
 Our
Activities since Completion of our Initial Public Offering
  Since our
Public Offering we have not been, and as of December 31, 2008, we were not,
engaged in any substantive commercial business. Instead, our sole activities
have related to the search for a suitable business combination. Following our
Public Offering, target business candidates were brought to our attention from
various unaffiliated sources, including investment bankers, venture capital
funds, private equity funds, consultants and other members of the financial
community, who present solicited or unsolicited proposals. Our officers and
directors, as well as their affiliates, were also sources of target business
candidates. In evaluating potential target companies, our Board of Directors
considered a wide variety of factors in addition to those listed
above.
  6
  In
furtherance of its corporate purpose, on February 5, 2008, the Company entered
into a merger agreement with Dynogen Pharmaceuticals, Inc., or Dynogen, and
certain other parties named therein.  However, the Company and Dynogen
mutually agreed to terminate the merger on April 16, 2008 due to then-current
market conditions, particularly those for small capitalization public biotech
companies, and the Company resumed its search for a suitable business
combination.  The Company entered into a second non-binding letter of
intent on December 13, 2008 (which extended the Company’s deadline to complete a
business combination to June 13, 2009) and continued its search for suitable
business combinations, entering into two additional non-binding letters of
intent on January 28, 2009 and February 9, 2009.  The Company and its
legal counsel pursued due diligence and drafted definitive agreements with
respect to each of these three target companies, but subsequently determined,
for various reasons, not to proceed with a definitive agreement with any of
these targets.
 
 Board
Approves Liquidation and Dissolution
 
 In light
of current market conditions and the limited time frame the Company has to
complete a business combination, on March 4, 2009, after careful consideration,
the Company’s Board of Directors determined that the Company would not be able
to consummate a business combination on or before June 13, 2009 and, as required
by our Second Amended and Restated Certificate of Incorporation, approved the
dissolution and liquidation of Apex.  In accordance with the Second
Amended and Restated Certificate of Incorporation, the Board of Directors must
now submit a plan of liquidation to our stockholders for their
approval.  Accordingly, subject to stockholder approval, the Company
will distribute to all of our public stockholders, in proportion to their
respective equity interests, an aggregate sum equal to the amount in the Trust
Account, inclusive of any interest (net of taxes payable), plus any remaining
net assets. Upon liquidation, it is likely that the per share value of the
residual assets remaining available for distribution (including Trust Account
assets) will be less than the per share price in the Public Offering (assuming
no value is attributed to the Warrants contained in the Units sold in the Public
Offering). The Initial Stockholders have waived their rights to participate in
any liquidation distribution with respect to shares of common stock owned by
them immediately prior to our Public Offering. There will be no distribution
from the Trust Account with respect to our warrants, which will expire
worthless.
 
 If we
were to expend all of the net proceeds of the Public Offering, other than the
proceeds deposited in the Trust Account, and without taking into account
interest earned on the Trust Account, the initial per-share liquidation price
would be $7.81, or $0.19 less than the Public Offering per unit price of $8.00.
The proceeds deposited in the Trust Account could, however, become subject to
the claims of our creditors which could be prior to the claims of our public
stockholders. We cannot assure you that the actual per share liquidation price
will not be less than $7.81 plus interest (net of taxes payable, which taxes, if
any, shall be paid from the Trust Account), due to claims of creditors. Although
we have sought (and will continue to seek) to have all vendors, prospective
target businesses and other entities we engage, execute agreements waiving any
rights, title, interest or claim of any kind in or to monies held in the Trust
Account there is no guarantee that all parties with which we do business will
execute such agreements. Our Initial Stockholders have agreed pursuant to
agreements with us and Lazard Capital Markets LLC and Ladenburg Thalmann &
Co., Inc., the underwriters of the Public Offering, that they will be liable on
a joint and several basis, to cover claims made by such third parties against
the Trust Account. But only if and to the extent, the claims reduce the amounts
available for payment to our public stockholders in the event of a liquidation
and the claims are made by a vendor or service provider for services rendered or
products sold to us or by a prospective acquisition target. However, our Initial
Stockholders will not have any personal liability as to any claimed amounts owed
to a third party who executed a waiver (including a prospective acquisition
target) or the underwriters. We cannot assure you, however, that they would be
able to satisfy those obligations.
  Upon
notice from us, the trustee of the Trust Account will commence liquidating the
investments constituting the Trust Account and will turn over the proceeds to
our transfer agent for distribution to our public
stockholders.   We will provide such notice promptly after
receiving stockholder approval for the dissolution and liquidation.
 
 Employees
  As of
December 31, 2008, we had three non-employee officers, all of whom are also
members of our Board of Directors, and no employees. These individuals are not
remunerated for their services as officers, are not obligated to contribute any
specific number of hours per week and devote only as much time as they deem
necessary to our affairs. The amount of time they devote will vary from time to
time based on our activities and then current circumstances. We have not and do
not intend to have any full time employees.
  7
  Available
Information
  We are
subject to the information requirements of the Exchange Act. Therefore, we file
periodic reports, proxy statements and other information with the SEC. Such
reports, proxy statements and other information may be obtained by visiting the
Public Reference Room of the SEC at 100 F Street, NW, Washington, DC 20549. You
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site
(www.sec.gov) that contains reports, proxy and information statements and other
information regarding issuers that file electronically.
  Item 1A.   RISK FACTORS
  An
investment in our securities involves a high degree of risk. You should consider
carefully all of the material risks described below, which refer to our business
and operations as of December 31, 2008, together with the other information
contained in this annual report on Form 10-K before making a decision to invest
in our securities. If any of the events described herein occur, our business,
financial conditions, and results of operations may be materially adversely
affected. In that event, the trading price of our securities could decline, and
you could lose all or part of your investment.
  RISKS
ASSOCIATED WITH OUR POTENTIAL BUSINESS
  Our
Board of Directors has announced its approval of our liquidation and
dissolution. Subject to stockholder approval, we will liquidate and distribute
our assets to our public stockholders.
  On March
4, 2009, our Board of Directors approved the liquidation and dissolution of the
Company and approved the submission of a plan of liquidation to our stockholders
for their approval.  Subject to such stockholder approval, we will
cease our corporate existence and distribute any remaining assets to our public
stockholders.
  Under
Delaware law, our dissolution requires the approval of the holders of a majority
of our outstanding stock, without which we will not be able to dissolve and
liquidate and distribute our assets to our public stockholders.
  Our Board
of Directors has determined we will not effect a business combination by June
13, 2009, and accordingly, we will promptly initiate procedures for our
dissolution and the distribution of our assets, including the funds held in the
Trust Account, to our public stockholders. We will seek stockholder approval for
our dissolution and plan for the distribution of our assets. Upon the approval
by our stockholders of our dissolution and plan for the distribution of our
assets, we will liquidate our assets, including the Trust Account, and after
reserving amounts sufficient to cover our liabilities and obligations and the
costs of dissolution and liquidation, distribute those assets solely to our
public stockholders. However, soliciting the vote of our stockholders will
require the preparation of preliminary and definitive proxy statements, which
will need to be filed with, and could be subject to the review of, the SEC. This
process could take up to several months. As a result, the distribution of our
assets to the public stockholders could be subject to a considerable delay.
Furthermore, we may need to postpone the stockholders meeting, re-solicit our
stockholders, or amend our plan for the distribution of our assets to obtain the
required stockholder approval, all of which would further delay the distribution
of our assets and result in increased costs. If we are not able to obtain
approval from a majority of our stockholders, we will not be able to dissolve
and we will not be able to distribute funds from our Trust Account to our public
stockholders and these funds will not be available for any other corporate
purpose. In that event, we will continue to pursue stockholder approval for our
dissolution. We cannot assure you that our stockholders will approve our
dissolution in a timely manner or will ever approve our dissolution. As a
result, we cannot provide investors with assurances of a specific timeframe for
our dissolution and the distribution of our assets. If our stockholders do not
approve a plan of dissolution and distribution and the funds remain in the Trust
Account for an indeterminate amount of time, we may be considered to be an
investment company.
 
 As
a result of being forced to liquidate before a business combination, our public
stockholders will receive less than the $8.00 per unit Public Offering price
upon distribution of the Trust Account and our warrants will expire
worthless.
  Because
we have been unable to complete a business combination and are forced to
liquidate our assets, the per-share liquidation will be less than $8.00 because
of the expenses of our Public Offering, our general and administrative expenses
and the costs of seeking a business combination after our Public
Offering.  Furthermore, there will be no distribution with respect to
our outstanding warrants and, accordingly, the warrants will expire worthless
upon our liquidation.
 
 8
  If
third parties bring claims against us, the proceeds held in trust could be
reduced and the per share liquidation price received by public stockholders will
be less than $7.81 per share.
  Our
placing of funds in the Trust Account may not protect those funds from third
party claims against us. Pursuant to Delaware General Corporation Law Section
281(b), upon our dissolution we will be required to pay or make reasonable
provision to pay all claims and obligations of the corporation, including all
contingent, conditional, or unmatured claims. While we intend to pay those
amounts from our funds not held in trust, we cannot assure you those funds will
be sufficient to cover such claims and obligations. Although we are obligated to
seek to have all vendors, prospective target businesses or other entities with
which we do business waive any right, title, interest, or claim of any kind in
or to any monies held in the Trust Account for the benefit of our public
stockholders, there is no guarantee that they will agree to such waivers, or
even if they agree to such waivers that they would be prevented from bringing
claims against the Trust Account, including but not limited to, fraudulent
inducement, breach of fiduciary responsibility, and other similar claims, as
well as claims challenging the enforceability of the waiver, in each case in
order to gain an advantage with a claim against our assets, including the funds
held in the Trust Account.
 
 The
NYSE Amex may delist our securities from trading on its exchange which could
limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
  Our
securities are listed on the NYSE Amex, a national securities
exchange.  On February 10, 2009, we received a deficiency notice from
the NYSE Amex indicating that we did not hold an annual meeting of stockholders
in 2008 and therefore, were not in compliance with its continued listing
requirements.  The notice stated that we may be subject to delisting
if we did not submit a plan for compliance within a specified time
period.  Because our Board of Directors approved our liquidation and
dissolution, the NYSE Amex advised us that we would not need to submit a plan of
compliance.  However, on March 6, 2009, following announcement of our
Board of Directors’ determination to seek dissolution and liquidation, the NYSE
Amex halted trading of our warrants as they are expected to expire
worthless.  We cannot assure you that our securities will continue to
be listed on the NYSE Amex in the future.
  If the
NYSE Amex de-lists our securities from trading on its exchange and we are not
able to list our securities on another exchange or to have them quoted on
NASDAQ, our securities could be quoted on the OTC Bulletin Board, or “pink
sheets”. As a result, we could face significant material adverse consequences
including:
  ·
              a limited availability of market
      quotations for our securities;
 ·
              a determination that our common
      stock is a “penny stock” which will require brokers trading in our common
      stock to adhere to more stringent rules and possibly resulting in a
      reduced level of trading activity in the secondary trading market for our
      securities;
 ·
              a limited amount of news and
      analyst coverage for our company; and
 ·
              a decreased ability to issue
      additional securities or obtain additional financing in the
      future.
  The
National Securities Markets Improvement Act of 1996, which is a federal statute,
prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities”. Since we are listed on the NYSE
Amex, our securities are covered securities. Although the states are preempted
from regulating the sale of our securities, the federal statute does allow the
states to investigate companies if there is a suspicion of fraud, and if there
is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a
state having used these powers to prohibit or restrict the sale of securities
issued by blank check companies generally, certain state securities regulators
view blank check companies unfavorably and might use these powers, or threaten
to use these powers, to hinder the sale of securities of blank check companies
in their states.
 
 In
connection with the dissolution, our stock transfer books will close, after
which it may not be possible for stockholders to trade in, or transfer, our
stock.
 
 In
connection with the dissolution, we intend to delist our common stock, warrants
and units from the NYSE Amex, close our stock transfer books and discontinue
recording transfers of our common stock at which time our common stock, warrants
and units and certificates evidencing such securities will not be assignable or
transferable on our books except by will, intestate succession or operation of
law.
 
 Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them in dissolution, regardless of when such
claims are filed.
  We cannot
assure you that third parties will not seek to recover from the assets
distributed to our public stockholders any amounts owed to them by us. Under the
DGCL, our stockholders could be liable for any claims against the corporation to
the extent of distributions received by them in dissolution. The limitations on
stockholder liability under the DGCL for claims against a dissolved corporation
are determined by the procedures that a corporation follows for distribution of
its assets following dissolution. If we complied with the procedures set forth
in Sections 280 and 281(a) of the DGCL (which would include, among other things,
a 60-day notice period during which any third-party claims can be brought
against us, a 90-day period during which we may reject any claims brought, an
additional 150-day waiting period before any liquidating distributions are made
to stockholders, as well as review by the Delaware Court of Chancery) our
stockholders would have no further liability with respect to claims on which an
action, suit or proceeding is begun after the third anniversary of our
dissolution. However, in accordance with our intention to liquidate and
distribute our assets to our stockholders as soon as reasonably possible after
dissolution, our Second Amended and Restated Certificate of Incorporation
provides that we will comply with Section 281(b) of the DGCL instead of Sections
280 and 281(a). Accordingly, our stockholders’ liability could extend to claims
for which an action, suit or proceeding is begun after the third anniversary of
our dissolution.
  9
 
 Stockholders
may not be able to recognize a loss for federal income tax purposes until they
receive a final distribution from us.
 
 As a
result of our liquidation, for United States federal income tax purposes,
stockholders will recognize gain or loss equal to the difference between (i) the
sum of the amount of cash distributed to them and the aggregate fair market
value at the time of distribution of any property distributed to them (including
transfers of assets to a liquidating trust), and (ii) their tax basis in their
shares of our capital stock. Any loss may generally be recognized only when the
final distribution has been received from us.
 
 Item 1B.   UNRESOLVED STAFF
COMMENTS
  Not
applicable.
  Item 2    PROPERTIES
  We
presently occupy office space at 18 Farm Lane, Hillsborough, California 94010
provided by Apex Bioventures, LLC, an affiliate of K. Michael Forrest, our
President and one of our directors. Such affiliate has agreed that, until we
complete a business combination, it will make office space, as well as certain
office and secretarial services, available to us as we may require from time to
time. We do not currently make any payments for the use of such office
space.
  We
consider our office space adequate for our current operations.
  Item 3    LEGAL PROCEEDINGS
  The
Company is not a party to any litigation in any court, and management is not
aware of any contemplated proceeding by any party against the Company or any of
its officers and directors.
  Item 4    SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
  No
matters were submitted to a vote of securityholders during the fourth quarter of
the year ended December 31, 2008.
 
 PART II
  Item 5
              Market For Registrant’s Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities.
  Since
June 8, 2007, our units, and after their split on June 20, 2007, our shares of
common stock and warrants, have all traded on the NYSE Amex (formerly the
American Stock Exchange) under the symbols “PEX.U”, “PEX,” and “PEX.WS”,
respectively. Prior to June 8, 2007, there was no established public trading
market for our common stock.  On March 6, 2009, following announcement
of our Board of Directors’ determination to seek dissolution and liquidation,
the NYSE Alternext halted trading of our warrants as they are expected to expire
worthless.
  The
closing high and low sales prices of our units, common stock, and warrants as
reported by the NYSE Amex, for the quarters indicated are as
follows:
 
 10
 
 Common Stock
                  
                  
                  Warrants
                  
                  
                  UnitsHigh
                  
                  
                  Low
                  
                  
                  High
                  
                  
                  Low
                  
                  
                  High
                  
                  
                  Low2007:Second
      Quarter
                  
                  $
                  7.23
                  
                  
                  $
                  7.20
                  
                  
                  $
                  0.84
                  
                  
                  $
                  0.80
                  
                  
                  $
                  8.09
                  
                  
                  $
                  8.02Third
      Quarter
                  
                  $
                  7.36
                  
                  
                  $
                  7.15
                  
                  
                  $
                  0.88
                  
                  
                  $
                  0.55
                  
                  
                  $
                  8.20
                  
                  
                  $
                  7.84Fourth
      Quarter
                  
                  $
                  7.38
                  
                  
                  $
                  7.20
                  
                  
                  $
                  0.65
                  
                  
                  $
                  0.51
                  
                  
                  $
                  7.90
                  
                  
                  $
                  7.78
  Common Stock
                  
                  
                  Warrants
                  
                  
                  UnitsHigh
                  
                  
                  Low
                  
                  
                  High
                  
                  
                  Low
                  
                  
                  High
                  
                  
                  Low2008:First
      Quarter
                  
                  $
                  7.53
                  
                  
                  $
                  7.25
                  
                  
                  $
                  0.65
                  
                  
                  $
                  0.22
                  
                  
                  $
                  7.89
                  
                  
                  $
                  7.73Second
      Quarter
                  
                  $
                  7.50
                  
                  
                  $
                  7.27
                  
                  
                  $
                  0.25
                  
                  
                  $
                  0.10
                  
                  
                  $
                  7.73
                  
                  
                  $
                  7.45Third
      Quarter
                  
                  $
                  7.59
                  
                  
                  $
                  7.40
                  
                  
                  $
                  0.15
                  
                  
                  $
                  0.06
                  
                  
                  $
                  7.81
                  
                  
                  $
                  7.36Fourth
      Quarter
                  
                  $
                  7.50
                  
                  
                  $
                  7.10
                  
                  
                  $
                  0.10
                  
                  
                  $
                  0.00
                  
                  
                  $
                  7.70
                  
                  
                  $
                  6.80
 
 As of
March 23, 2009, there was one holder of record for our units, and there
were 11 stockholders of record of our common stock and 10 holders of record of
our warrants. Such numbers do not include beneficial owners holding shares or
warrants through nominee names.
  We have
not paid any dividends on our common stock to date and do not intend to pay
dividends prior to our dissolution and liquidation.
 
 Use
of Proceeds from our Initial Public Offering
  The
effective date of our registration statement, which was filed on Form S-1 under
the Securities Act of 1933 (File No. 333-135755), and which relates to the
Public Offering of our units, was June 7, 2007. Each unit consisted of one share
of common stock and one warrant to purchase one share of common stock. A total
of 8,625,000 units were registered at a proposed maximum aggregate offering
price of $69,000,000. The Public Offering was consummated on June 13, 2007. The
underwriters of the Public Offering were Lazard Capital Markets LLC and
Ladenburg Thalmann & Co. Inc. Each of our units commenced trading its
component share of common stock and warrant separately on June 20,
2007.
  Of the net proceeds from the Public
Offering and the Private Placement, $67,330,000 (including $2,070,000
attributable to the deferred underwriters’ discounts and commissions) has been
placed in a Trust Account at J.P. Morgan Chase N.A., maintained by Continental
Stock Transfer & Trust Company, acting as trustee, and invested by Morgan
Stanley. Except for up to $1,600,000 interest income released to us, net of
income taxes, the proceeds held in the Trust Account will not be released until
our dissolution, at which point the remaining proceeds will be distributed to
our public stockholders. As of December 31, 2008 we had
withdrawn all of the $1,600,000 interest income for working capital
requirements.
 
 To the
extent such out-of-pocket expenses exceed the available proceeds not deposited
in the Trust Account and interest income, net of income taxes, of $1,600,000 of
the interest earned, net of taxes payable on such interest, that will be
released to us from the trust account, our officers and directors will not be
reimbursed for such expenses.
  The net
proceeds of the Public Offering which are held in the Trust Account are invested
only in United States “government securities,” defined as any Treasury Bills
issued by the United States having a maturity of 180 days or less or in money
market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act of 1940, as amended so that we are not deemed to be an
investment company under the Investment Company Act of 1940. Interest income,
net of taxes payable on such interest, of $1,600,000 is releasable to us from
the trust account to fund our working capital requirements. The funds available
to us outside of the Trust Account, together with interest income, net of income
taxes on such interest, to be released to us for working capital requirements,
were insufficient to allow us to operate and accordingly, each of our Initial
Stockholders provided advances to us in November 2008.
  No
compensation of any kind, including finder’s and consulting fees, will be paid
to any of our directors, officers or Initial Stockholders or any of their
affiliates, other than payments of approximately $1,667 per month (assuming two
days work per week) to Lauren Elliott, the daughter of Darrell J. Elliott, our
Chairman and Chief Executive Officer, for administrative services. However, our
directors and officers have and will receive reimbursement for any out-of-pocket
expenses incurred by them in connection with activities on our behalf, such as
participating in the offering process, identifying potential target businesses,
performing due diligence on suitable business combinations and dissolving and
liquidating the Company.
  11
  Because a business combination has not
occurred in the time required by our Second Amended and Restated Certificate of
Incorporation, a public stockholder will be entitled to receive funds from the
trust account only upon our dissolution. In no other circumstances will a public
stockholder have any right or interest of any kind to or in the Trust
Account.  Our
Initial Stockholders, including our officers and directors (or their
affiliates), will be entitled to receive distributions of our assets, including
funds from the Trust Account, solely with respect to any shares of common stock
which they purchased in or following the Public Offering.
  Item 6    SELECTED FINANCIAL
DATA
  Not
applicable as the Company is a smaller reporting company.
 
 Item 7
              MANAGEMENT’S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
  The
following discussion should be read in conjunction with our financial statements
and footnotes thereto contained in this report.
  Overview
  We were
formed on June 1, 2006, to serve as a vehicle to acquire, through a merger,
capital stock exchange, asset acquisition or other similar business combination,
one or more domestic or international assets or an operating business in the
healthcare industry. Our initial business combination must be with a target
business or businesses whose fair market value is at least equal to 80% of net
assets at the time of such acquisition. We intend to utilize cash derived from
the proceeds of our Public Offering, our capital stock, debt or a combination of
cash, capital stock and debt, in effecting a business combination.
  On June
13, 2007, we consummated our initial public offering of 8,625,000 units. Each
unit consists of one share of common stock and one redeemable common stock
purchase warrant. Each warrant entitles the holder to purchase from us one share
of our common stock at an exercise price of $6.00.
  Results
of Operations
 
 Our net
loss of $61,205 for the year ended December 31, 2008 consisted of formation and
operating costs of $1,223,452 offset by dividend and interest income of
$1,174,027. For the year ended December 31, 2008 we recorded a provision for
income taxes in the amount of $11,780.  Formation and operating costs
consisted primarily of professional and consulting fees, travel, franchise taxes
and insurances, and merger related expenses.  Due diligence related
expense for Dynogen of $395,000, with an additional $150,000 for legal expenses,
were incurred, primarily, during the first quarter of 2008. Due diligence
expenses associated with other potential acquisitions were incurred throughout
2008.  Dividend and interest income was approximately $612,000 lower
in 2008, compared with 2007, due to lower interest rates on investments held in
trust.
  Our net
income of $696,925 for the year ended December 31, 2007 consisted of formation
and operating costs of $581,816, offset by dividend and interest income of
$1,785,716. For the year ended December 31, 2007 we recorded a provision for
income taxes in the amount of $506,975. Formation and Operating Costs consisted
primarily of consulting fees, travel and franchise taxes. There were no major
merger-related costs incurred in 2007.
  The net
income of $583,396 for the period from June 1, 2006 (date of inception) to
December 31, 2008 consisted of formation and operating costs of $1,858,656,
offset by dividend and interest income of $2,960,807 and a provision for income
taxes of $518,755.
  Liquidity
and Capital Resources
  Our net
proceeds from the sale of our units, including $1,800,000 of proceeds from the
Private Placement sale of 1,800,000 warrants to our Initial Stockholders were
approximately $65,300,000. Upon the closing of the Public Offering and Private
Placement, $67,330,000, including $2,070,000 of the underwriters’ deferred
discounts and commissions, were placed in trust with the remaining funds being
held outside of the trust. The remaining proceeds available have been and will
be used by us to provide for business, legal and accounting due diligence on
prospective acquisitions and continuing general and administrative expenses. We
have used all or substantially all of the net proceeds of the Public Offering
and Private Placement held outside the trust account and the up to $1,600,000 of
interest income (net of income taxes payable thereon) available to us for
working capital to acquire a target business, including identifying and
evaluating prospective acquisition candidates, selecting the target business,
and structuring, negotiating and consummating the business
combination.
 
 In
November, 2008, the Company issued promissory notes for $170,000 to our Initial
Stockholders, of which $78,284 was received as of December 31, 2008, to provide
ongoing working capital. The remaining balance of the notes was received during
the first quarter of 2009.  We believe the funds available to us
outside of the Trust Account ($52,844 as of December 31, 2008), and the
remaining proceeds from the notes by the Initial Stockholders, will be
sufficient to allow us to consummate the liquidation and distribution
process.
  12
 Off
Balance Sheet Arrangements
  Options
and warrants issued in conjunction with our Public Offering are equity linked
derivatives and accordingly represent off-balance sheet arrangements. The
options and warrants meet the scope exception in paragraph 11(a) of FAS 133 and
are accordingly not accounted for as derivates for purposes of FAS 133, but
instead are accounted for as equity. For a more complete discussion of the
treatment of the underwriter’s purchase option and the warrants, see footnote 3
to the financial statements.
  Item
7A.   Quantitative and Qualitative Disclosures About Market
Risk.
  Not
applicable as the Company is a smaller reporting company.
 
 Item 8    Financial Statements and
Supplementary Data.
  Reference
is made to pages F-1 through F-16 comprising a portion of this Annual Report on
Form 10-K.
  Index to Financial Statements and Financial Statement Schedules NumberFinancial
      Statements:Report
      of Independent Registered Public Accounting Firm
                    
                    
                    F-1Balance
      Sheets as of December 31, 2008 and 2007
                    
                    
                    F-2Statements
      of Operations for the Years Ended December 31, 2008 and 2007 and the
      period from June 1, 2006 (inception) to December 31,
    2008
                    
                    
                    F-3Statements
      of Stockholders’ Equity (Deficiency) for the period from June 1, 2006
      (inception) to December 31, 2008
                    
                    
                    F-4Statements
      of Cash Flows for the Years Ended December 31, 2008 and 2007 and the
      period from June 1, 2006 (inception) to December 31, 2008
                    
                    
                    F-5Notes
      to Financial Statements
                    
                    
                    F-6
  Item 9    Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.
  None.
  Item 9A. Controls and
Procedures.
  An
evaluation of the effectiveness of our disclosure controls and procedures as of
December 31, 2008 was made under the supervision and with the participation of
our management. Based on that evaluation, our management concluded that our
disclosure controls and procedures are effective as of the end of the period
covered by this report to ensure that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.
 
 Management’s
Report on Internal Control Over Financial Reporting.
  Our
company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) for our company. Our company’s internal control
over financial reporting is designed to provide reasonable assurance, not
absolute assurance, regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles in the United States of America.
Internal control over financial reporting includes those policies and procedures
that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our company’s
assets; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles in the United States of America, and
that our company’s receipts and expenditures are being made only in accordance
with authorizations of our management and directors; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect
on the financial statements.
  13
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions and that the degree of compliance
with the policies or procedures may deteriorate.
  As
required by Rule 13a-15(c) promulgated under the Exchange Act, our management,
with the participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our internal control over financial
reporting as of December 31, 2008. Management’s assessment was based on criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control over Financial Reporting. Management, under the
supervision and with the participation of the Company’s Chief Executive Officer
and Chief Financial Officer, assessed the effectiveness of the company’s
internal control over financial reporting as of December 31, 2008 and concluded
that it is effective.
  This
Annual Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities Exchange
Commission that permit the Company to provide only management’s report in this
Annual Report.
  Changes
in Internal Control over Financial Reporting
  There
were no changes in our internal control over financial reporting during the
fourth quarter of our fiscal year ended December 31, 2008 that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting.
 
 Item 9B. OTHER INFORMATION
  Not
applicable.
  14
  PART III
  Item 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
  Directors
and Executive Officers
  As of
March 23, 2009, our Board of Directors, or the Board, consisted of eight
directors.  Set forth below are the names of our directors, their
ages, their offices in the Company, if any, their principal occupations or
employment for the past five years, the length of their tenure as directors and
the names of other public companies in which such persons hold directorships.
Each director is elected to serve until our next annual meeting of stockholders
or the sooner of his resignation or the date when his successor is duly
appointed and qualified.
  Name
                
                Age
                
                PositionDarrell
      J. Elliott
                
                62
                
                Chairman,
      Chief Executive Officer and DirectorK.
      Michael Forrest
                
                65
                
                President,
      Chief Operating Officer and DirectorGary
      E. Frashier
                
                72
                
                Chief
      Financial Officer, Executive Vice President, Secretary and
      DirectorRobert
      J. Easton (1)(2)
                
                64
                
                DirectorJohn
      J. Chandler (1)
                
                67
                
                DirectorNancy
      T. Chang (2)
                
                59
                
                DirectorAnthony
      J. Sinskey (2)
                
                69
                
                DirectorRobert
      L. Van Nostrand (1)
                
                51
                
                Director
 
 
 (1)Member of our Audit Committee
 (2)Member
of our Nominating and Governance Committee
  Darrell
Elliott currently serves as our Chairman and Chief Executive
Officer.  Additionally, he has served as one of our directors since
inception.  Mr. Elliott is currently Chief Executive Officer and
President of Isuma Strategies Inc., a strategic consulting firm for private
equity in the biopharma industry.  From October 2007 to December 2008,
Mr. Elliott, through his affiliation with Isuma Strategies Inc., provided
service as an interim Chief Executive Officer to Virexx Medical Corp., a
Canadian biotech company.  Mr. Elliott also served as Chairman of
Virexx Medical Corp.  From August 1999 to March 2006, he served as
Senior Vice President and Managing Director of MDS Capital Corp., President of
MDS Ventures Pacific Inc., Chairman and Chief Executive Officer of British
Columbia Medical Innovations Fund and Vice President of Canadian Medical
Discoveries Fund, all of which were associated but independent venture capital
firms investing in the North American healthcare industry.  From
December 1989 to March 1999 (with a four month’s hiatus in 1993 while the Fund
was reorganized), he was a Regional Vice President of Royal Bank Capital Corp.,
a broad-based venture capital firm, and was founding Managing Director of its
North American healthcare investing practice.  Mr. Elliott currently
serves as a director of several private and public companies in the U.S. and
Canada, including Agrisoma Biosciences Inc., Aderis Inc., Isuma Strategies Inc.,
Discovery Parks Holdings Ltd., SMC Ventures, Inc., Calyx Bio-Ventures Inc.,
Auricle BioMedical Corporation and Transformative Ventures Ltd.  Mr.
Elliott holds a B.A. (Hons) Economics from University of South Africa in
Pretoria.
  K. Michael
Forrest is currently our president and chief operating officer and has
served as one of our directors since our inception.  Mr. Forrest is
also currently Chairman of Apex Bioventures, LLC, an investment and consulting
company focusing on emerging companies in the healthcare
industry.  Mr. Forrest has over 35 years of experience in the
biotechnology and pharmaceutical industries.  From March 2007 through
March 2008, Mr. Forrest served as Interim Chief Executive Officer of AVI
BioPharma, Inc. (NASDAQ: AVII), a biotech and pharmaceutical company focusing on
treatments for Duchenne Muscular Dystrophy, cardiovascular restenosis, and viral
infections, including Ebola virus and Marburg virus, for which he also serves on
the board of directors.  From November 1996 to January 2005, Mr.
Forrest was President and Chief Executive Officer of Cellegy Pharmaceuticals,
Inc., a specialty pharma company developing and marketing products in the areas
of gastroenterology, women’s health and sexual dysfunction.  From
November 1994 to December 1995, Mr. Forrest was President and Chief Executive
Officer of Mercator Genetics, Inc., a genomics company.  From March
1991 to June 1994, Mr. Forrest was President and Chief Executive Officer of
Transkaryotic Therapies, Inc., a biotechnology company subsequently acquired by
Shire plc.  From June 1968 to September 1980, Mr. Forrest occupied
various senior management and marketing positions with Pfizer Inc. (NYSE: PFE),
and from October 1980 to March 1991, was with American Cyanamid Company where he
served as Vice President (Worldwide), Planning and Commercial Development for
the company’s Medical Group, which included pharmaceuticals, medical devices and
OTC products, and as Vice President of Lederle Laboratories and Vice President
of Lederle International.  Mr. Forrest also serves on the board of
directors of Tekmira Pharmaceuticals Corporation, a Canadian biotech and
pharmaceutical company focusing on cancer therapeutics.  He holds a
B.S. in Business Administration, from Georgetown University.
  15
  Gary E. Frashierserves as our Chief Financial Officer, Secretary and as an Executive Vice
President. Additionally, he has served as one of our directors since our
inception. Mr. Frashier is also President and Principal of Management
Associates, a private firm that provides strategic consulting services to
entrepreneurial companies in the life sciences field.  From 1990 to
2000, Mr. Frashier held various executive officer positions, including
President, Chief Executive Officer, and Chairman, at OSI Pharmaceuticals, Inc.
(NASDAQ: OSIP), a biotechnology company focusing on cancer, eye disease and
diabetes therapeutics. After retiring as Chairman of the Board in 2000 and
through the present, Mr. Frashier continues to serve as a strategic consultant
to OSI. From 1987 to 1990, Mr. Frashier served as Chief Executive Officer of
Genex Corporation, a protein engineering company. From 1984 to 1987, Mr.
Frashier served as the Chief Executive Officer of Continental Water Systems,
Inc., a company which manufactured equipment to produce ultra-pure water for the
pharmaceutical, biotechnology and micro-electronics industries. From 1980 to
1984, Mr. Frashier was Executive Vice President of Millipore Corporation (NYSE:
MIL) and also served as President of Waters Associates, Inc., a manufacturing
company specializing in liquid chromatography products, which was a subsidiary
of Millipore. At Millipore, Mr. Frashier also served as President, International
Operations. Mr. Frashier currently is Executive Chairman and a director of
America Stem Cell, Inc.  Mr. Frashier serves on the board of directors
of Tekmira Pharmaceuticals Corporation, a Canadian public company, Alseres
Pharmaceuticals, Inc., a public biotechnology company and Achillion
Pharmaceuticals, Inc.  Mr. Frashier was selected as the Long Island
“Businessman of the Year” in 1993, by the Wharton Club. He is a registered
professional engineer in chemical engineering, a member of the Society of Sloan
Fellows (MIT) and a former member of the Young President’s Organization. Mr.
Frashier has a B.S. in Chemical Engineering from Texas Tech University, where he
was subsequently honored as a “Distinguished Engineer,” and an M.S. degree in
Management (MBA) from the Massachusetts Institute of Technology, where he was
selected as an Alfred P. Sloan Fellow in Management.
  Robert J.
Easton is currently one of our directors and has over twenty-five years
of experience in management consulting to the healthcare
industry.  Since May 2008, Mr. Easton has been consulting to medical
companies and investors as Chairman of Scisive Consulting LP.  From
October 2006 to April 2008, Mr. Easton was primarily devoted to the formation of
and acquisition search for Apex.  From May 2000 to October 2006, Mr.
Easton was Chairman of Easton Associates, LLC.  From May 1996 to May
2000, Mr. Easton was Managing Director of IBM Healthcare
Consulting.  Mr. Easton also co-founded The Wilkerson Group, where he
was Vice-President, from January 1986 until June 1991, President from June 1991
until June 1994, and Managing Director from June 1994 until May
1996.  From 1988 to 1990, Mr. Easton was President of the Biomedical
Marketing Association.  From 1995 to 2008 he was been a Director of
CollaGenex Pharmaceuticals, Inc., a specialty pharmaceutical
company.  From 2002 to present he has been a Director of Cepheid,
Inc., a molecular diagnostics company.  He recently joined the Board
of the New York Biotechnology Association and has been Chairman of Gilda’s Club
of New York City, a non-profit cancer charity, since 2004.  Mr. Easton
received an M.B.A. from Harvard Graduate School of Business Administration and a
B.S. in Chemical Engineering from Rice University.
  John J.
Chandler is currently one of our directors.  Mr. Chandler has
over 35 years of business development and mergers and acquisitions experience in
the pharmaceutical, biotech, specialty pharmaceutical, medical device and
chemical industries.  From May 1998 to September 2006, Mr. Chandler
was Vice President-Corporate Development for Cellegy Pharmaceuticals, Inc., a
biopharmaceutical company developing and marketing products in the areas of
gastroenterology, women’s health and sexual dysfunction.  From January
1995 to May 1998, Mr. Chandler was Vice President-Europe for the Sherwood-Davis
& Geck medical device division of Wyeth (NYSE: WYE).  From August
1968 to December 1994, Mr. Chandler was employed by American Cyanamid Company,
beginning as a sales representative and eventually holding several senior
management positions, including Vice President of Lederle International,
Cyanamid’s international pharmaceutical division.  Mr. Chandler holds
an M.B.A. in Marketing from Seton Hall University and a B.S. in Biology from
Queens College of the City University of New York.
  Nancy T. Chang,
Ph.D. has served as one of our directors since inception.  Dr.
Chang joined OrbiMed Advisors in 2007, and is the Chairman and Sr. Managing
Director for Asia.  From 2006 to 2007, Dr. Chang served as Chairman of
Tanox Inc., a biotech and pharmaceutical company focusing on the development of
biotherapeutics for the treatment of immune-mediated diseases, inflammation,
infectious disease and cancer. Dr. Chang co-founded Tanox, Inc. in 1986 and
served as President and Chief Executive Officer until 2006. Dr. Chang was
Chairman of the Federal Reserve Board of Directors in Houston, Texas in 2008.
From 1982 to 1986, Dr. Chang worked in research management at Centocor, Inc., a
biological company which is now part of Johnson & Johnson, and served as
Director of Research. From 1986 to 1991, Dr. Chang was Associate Professor of
Virology at Baylor College of Medicine. Dr. Chang currently serves as a director
of Charles River Laboratories International, Inc., a public biotechnology
company, as well as serving on the boards of several private biotechnology
companies. Dr. Chang received a Ph.D. in biological chemistry from Harvard
University. She did her postdoctoral research at the Roche Institute of
Molecular Biology.
  16
  Anthony J.
Sinskey, Sc.D. has served as one of our directors since inception. He is
currently Professor of Microbiology at the Massachusetts Institute of Technology
and Professor of Health Sciences and Technology at the Harvard-MIT Division of
Health Sciences & Technology. Dr. Sinskey also holds positions as
Co-Director of the Malaysia-MIT Biotechnology Partnership Program and as
Co-Director of the Center for Biomedical Innovation.  Dr. Sinskey has
been a co-founder of several biotechnology companies, including Metabolix Inc.
(NASDAQ: MBLX), Merrimack Pharmaceuticals Inc. and Tepha, Inc. and was a
scientific co-founder of Genzyme Corporation (NASDAQ: GENZ). Dr. Sinskey serves
as Editor and Co-founder of Metabolic Engineering, as
Editor of Process
Biochemistry, and a member of the Editorial boards of Pharmaceutical Discovery and
Applied Microbiology and
Biotechnology.  Dr. Sinskey currently serves on the board of
directors of ABEC Inc., Merrimack Pharmaceuticals Inc., Metabolix Inc. and
Tepha, Inc. He is an advisor to VIMAC Ventures LLC, QRxPharma Limited and the
Business Development Bank of Canada.  Dr. Sinskey received a B.S. from
the University of Illinois and his Sc.D. from the Massachusetts Institute of
Technology. His post-doctoral work was done at the Harvard School of Public
Health.
  Robert L. Van
Nostrand has served as one of our directors since inception. Mr. Van
Nostrand served as Chief Financial Officer and Executive Vice President of AGI
Dermatics, Inc., a bio-pharmaceutical laboratory specializing in skin
photobiology, from 2007 to September 2008 when the company was
sold.  From 1986 to 2007, Mr. Van Nostrand held various executive
officer positions with OSI Pharmaceuticals, Inc. (NASDAQ: OSIP), a biotechnology
company focusing on cancer, eye disease and diabetes therapeutics, including
Senior Vice President and Chief Compliance Officer, Vice President and Chief
Financial Officer, Vice President, Finance and Administration, Chief Accounting
Officer, Treasurer and Secretary.  Mr. Van Nostrand currently serves
as Chairman of the New York Biotechnology Association.  Mr. Van
Nostrand also serves on the board of directors of Metabolix, Inc., Achillion
Pharmaceuticals, Inc. (NASDAQ: ACHN), on the Cold Spring Harbor DNA Leaning
Center Corporate Advisory Board and on the Foundation Board of Farmingdale
University. Mr. Van Nostrand holds a B.S. in Accounting from Long Island
University, New York, and he completed advanced management studies at the
Wharton School, Philadelphia, Pennsylvania. He is a Certified Public
Accountant.
  Committees of the
Board
  Audit
Committee.  Our audit committee currently consists of Robert L.
Van Nostrand, Robert J. Easton and John J. Chandler.
  The audit
committee reviews the professional services and independence of our independent
registered public accounting firm and our accounts, procedures and internal
controls.  The audit committee also selects the firm that will serve
as our independent registered public accounting firm, reviews and approves the
scope of the annual audit, reviews and evaluates with the independent public
accounting firm our annual audit and annual financial statements, reviews with
management the status of internal accounting controls, evaluates problem areas
having a potential financial impact on us that may be brought to the committee’s
attention by management, the independent registered public accounting firm or
the board of directors, and evaluates all of our public financial reporting
documents.
  We have
agreed that our audit committee will review and approve all expense
reimbursements made to our officers, directors or senior advisors and that any
expense reimbursement payable to members of our audit committee will be reviewed
and approved by our Board of Directors, with the interested director or
directors abstaining from such review and approval.
  In
accordance with applicable federal securities laws and the rules of the NYSE
Amex, we have adopted an audit committee charter that incorporates these duties
and responsibilities.
  Financial
Experts on Audit Committee
  The audit
committee will at all times be composed exclusively of “independent directors”
who are “financially literate” as defined under the NYSE Amex listing
standards.  The NYSE Amex listing standards define “financially
literate” as being able to read and understand fundamental financial statements,
including a company’s balance sheet, income statement and cash flow
statement.
  In
addition, we must certify to the NYSE Amex that the committee has, and will
continue to have, at least one member who has past employment experience in
finance or accounting, requisite professional certification in accounting, or
other comparable experience or background that results in the individual’s
financial sophistication.  The Board of Directors has determined that
Robert VanNostrand satisfies the NYSE Amex definition of financial
sophistication and also qualifies as an “audit committee financial expert,” as
defined under rules and regulations of the SEC.
  Nominating and Governance
Committee.
  We have
established a nominating and governance committee of the Board of
Directors.  This committee is responsible for overseeing the selection
of persons to be nominated to serve on our Board of Directors.  The
nominating and governance committee also supervises the Board of Directors’
annual review of director independence and the Board of Directors’ performance
evaluations. In accordance with applicable federal securities laws and the rules
of the NYSE Amex, we have adopted a nominating committee charter that delineates
these duties and responsibilities.  The nominating committee consists
of Robert J. Easton, as chairman, Nancy T. Chang and Anthony J. Sinskey, each of
whom is an independent director under the NYSE Amex listing
standards.
  17
  Guidelines
for Selecting Director Nominees
  The
guidelines for selecting nominees is set forth in the nominating committee
charter and will generally provide that persons to be nominated should be
actively engaged in business endeavors, have an understanding of financial
statements, corporate budgeting and capital structure, be familiar with the
requirements of a publicly traded company, be familiar with industries relevant
to our business endeavors, be willing to devote significant time to the
oversight duties of the board of directors of a public company, and be able to
promote a diversity of views based on the person’s education, experience and
professional employment.
  Code
of Conduct and Ethics
  We have
adopted a code of ethics that applies to our officers, directors and employees
in accordance with applicable federal securities laws and the rules of the
American Stock Exchange.  We have filed a copy of our code of ethics
as an exhibit to a Current Report on Form 8-K dated June 19,
2007.  You may then review this document by accessing our public
filings at the SEC’s web site at www.sec.gov. In addition, a copy of our code of
ethics will be provided without charge upon request to us. We also intend to
disclose any amendments to or waivers of certain provisions of our code of
ethics in a Current Report on Form 8-K.
  Section
16(a) Beneficial Ownership Reporting Compliance
  Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
requires our officers, directors and persons who own more than ten percent of a
registered class of our equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and ten percent stockholders are required by regulation to furnish us
with copies of all Section 16(a) forms they file. Based solely on copies of such
forms received or written representations from certain reporting persons that no
Forms 3, 4 or 5 were required for those persons, we believe that, during the
fiscal year ended December 31, 2008, all filing requirements applicable to our
officers, directors and greater than ten percent beneficial owners were complied
with.
  
 Item 11 . EXECUTIVE
COMPENSATION
 
 Since
Apex’s formation on June 1, 2006, its operations have been limited to
organizational activities and, after its initial public offering, to activities
relating to completing a business combination.  To date, no current
Apex executive officer, director or founding stockholder, nor any affiliate
thereof, has received any cash or equity compensation for services rendered to
Apex, except as set forth herein.  In addition, Apex does not propose
to pay compensation of any kind, including finder’s and consulting fees, to any
of Apex’s current officers, directors or stockholders or any of their respective
affiliates, for services rendered prior to or in connection with the
merger.  However, Apex’s officers and directors will be reimbursed for
any out-of-pocket expenses incurred in connection with activities on its behalf,
such as participating in the offering process with respect to its initial public
offering, identifying potential target businesses and performing due diligence
on suitable business combinations.  There is no limit on the amount of
these out-of-pocket expenses and there will be no review of the reasonableness
of the expenses by anyone other than the Apex Board of Directors, which includes
persons who may seek reimbursement, or a court of competent jurisdiction if such
reimbursement is challenged.  During fiscal year 2008, Apex paid
approximately $155,000 for out-of-pocket expenses incurred by Apex’s officers
and directors.
  The
Company does not own any real estate or other physical properties. The Company’s
headquarters are located at 18 Farm Lane, Hillsborough, California,
94010.  Apex Bioventures, LLC, an affiliate of K. Michael Forrest, the
Company’s President and one of the Company’s directors, provides office space to
the Company and has agreed that it will make such office space as the Company
may require from time to time available at no cost.
  Apex does
not currently have any equity compensation plans.
  Item 12 .
                SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS
 
 As of
February 27, 2009, the Company’s Initial Stockholders, including all of its
directors and officers, beneficially owned and were entitled to vote
2,156,250 shares, or 20%, of the Company’s common stock. The following
table sets forth information with respect to the beneficial ownership of the
Company’s common stock, as of February 27, 2009, by its officers, directors and
each person known to the Company to be the beneficial owner of more than 5% of
any class of its voting securities. Unless otherwise indicated by footnote, the
address for each listed stockholder is c/o Apex Bioventures Acquisition
Corporation, 18 Farm Lane, Hillsborough, California 94010.
  18
  Beneficial ownership of
                            Apex common stock as of
                            February 27, 2009Name and Address of Beneficial Owner
                          
                          Number of
                            Shares(1)
                          
                          
                          Percent
                            of ClassDarrell
      J. Elliott(2)(3)
                            1763
      Orkney Place, North Vancouver, BC, V7H 2Z1
                          
                          
                          268,858
                          
                          
                          
                          2.5
                          %K.
      Michael Forrest(2)
                            18
      Farm Lane, Hillsborough, CA 94010
                          
                          
                          472,803
                          
                          
                          
                          4.4
                          %Gary
      E. Frashier(2)(4)
                            215
      West Bandera Road, Suite 114, Boerne, TX 78006
                          
                          
                          359,790
                          
                          
                          
                          3.3
                          %Robert
      J. Easton(2)
                            525
      E. 80th
      Street, New York, New York 10075
                          
                          
                          397,310
                          
                          
                          
                          3.7
                          %John
      J. Chandler(2)
                            2916
      Thomas Smith Lane, Williamsburg, VA 23185
                          
                          
                          126,313
                          
                          
                          
                          1.2
                          %Nancy
      T. Chang(2)
                            10301
      Stella Link, Houston, TX, 77025
                          
                          
                          183,951
                          
                          
                          
                          1.7
                          %Anthony
      J. Sinskey(2)
                            Department
      of Biology, Room 68-370A
                            Massachusetts
      Institute of Technology
                            Cambridge,
      MA 02139
                          
                          
                          97,474
                          
                          
                          
                          0.9
                          %Robert
      L. Van Nostrand(2)
                            Mariners
      Circle, West Islip, NY 11795
                          
                          
                          152,277
                          
                          
                          
                          1.4
                          %Deutsche
      Bank AG(5)
                            Theodor-Heuss-Allee
      70
                            60468
      Frankfurt am Main
                            Federal
      Republic of Germany
                          
                          
                          1,121,888
                          
                          
                          
                          10.4
                          %HBK
      Investments L.P.(6)
                            2101
      Cedar Springs Road, Suite 700
                            Dallas,
      TX 75201
                          
                          
                          1,078,100
                          
                          
                          
                          9.9
                          %QVT
      Financial LP(7)
                            1177
      Avenue of the Americas, 9th Floor
                            New
      York, New York 10036
                          
                          
                          916,236
                          
                          
                          
                          8.5
                          %Polar
      Securities Inc.(8)
                            2372
      Bay Street, 21st floor  Toronto, Ontario M5H 2W9,
      Canada
                          
                          
                          789,679
                          
                          
                          
                          7.3
                          %Pacific
      Assets Management, LLC(9)
                            11601
      Wilshire Blvd, Suite 2180
                            Los
      Angeles, CA 90025
                          
                          
                          796,766
                          
                          
                          
                          7.4
                          %Azimuth
      Opportunity, Ltd.
                            c/o/
      Ogier
                            Qwomar
      Complex, 4th
      Floor
                            P.O.
      Box 3170
                            Road
      Town, Tortola
                            British
      Virgin Islands
                          
                          
                          696,300
                          
                          
                          
                          6.5
                          %All
      directors and executive officers as a group (eight
      individuals)
                          
                          
                          2,058,776
                          
                          
                          
                          19.1
                          %(10)
  19
  (1)
              These
      amounts do not include the shares of common stock underlying the warrants
      purchased by our directors and executive officers in a private placement
      immediately prior to our initial public
  offering.
 (2)
              Each
      of the noted individuals is a director of
Apex.
 (3)
              These
      shares are held by Invivos Limited Partners, a British Columbia limited
      partnership.  Ninety-nine percent of the limited partnership
      interests of Invivos Limited Partners are held collectively by Mr.
      Elliott’s wife and children.  The remaining 1% is held by
      Invivos Partners, Ltd., a British Columbia corporation.  Mr.
      Elliott, in turn, owns 100% of the capital stock of Invivos Partners,
      Ltd.  Accordingly, Mr. Elliott holds voting and dispositive
      power over all of the shares of common stock, but disclaims any pecuniary
      interest therein.
 (4)
              Mr.
      Frashier holds all of these shares of our common stock through Treasure
      Road Partners, Ltd., a Texas family limited partnership, of which he and
      his wife, Giva H. Frashier, are the sole owners (on an equal basis) and
      managers.  Accordingly, Mr. Frashier and his wife share voting
      and dispositive power over these
shares.
 (5)
              Information
      based on Schedule 13G by Deutsche Bank AG on February 9,
    2009.
 (6)
              Information
      based on Schedule 13G filed by HBK Investments L.P., HBK Services LLC, HBK
      Partners II L.P., HBK New York LLC, HBK Management LLC, and HBK Master
      Fund L.P., on January 26, 2009.
 (7)
              Information
      based on Schedule 13G filed by QVT Financial LP, QVT Financial GP LLC, QVT
      Fund LP, and QVT Associates GP LLC on January 28, 2009.  As
      disclosed in such Schedule 13G, QVT Financial LP is the investment manager
      for QVT Fund LP, QVT Financial GP LLC is the general partner of QVT
      Financial LP, and QVT Associates GP LLC is the general partner of QVT Fund
      LP.
 (8)
              Information
      based on Schedule 13G filed by Polar Securities Inc. and North Pole
      Capital Master Fund on February 14, 2008.  As disclosed in such
      Schedule 13G, Polar Securities Inc. is the investment advisor for North
      Pole Capital Master Fund and a number of discretionary accounts over which
      it has voting and dispositive
power.
 (9)
              Information
      based on Schedule 13G filed by Jonathan M. Glaser, Daniel Albert David,
      Roger Richter, Pacific Assets Management, LLC, Pacific Capital Management,
      Inc., and JMG Triton Offshore Fund, Ltd. on February 17,
      2009.  As disclosed in such Schedule 13G, Pacific Assets
      Management, LLC is the investment advisor to JMG Triton Offshore Fund,
      Ltd. and Pacific Capital Management, Inc., is a member of Pacific Assets
      Management, LLC.  Mr. Glaser, Mr. David and Mr. Richter are
      control persons of Pacific Assets Management, LLC and Pacific Capital
      Management, Inc.
 (10)
              The
      percentage of beneficial ownership of officers and directors is less than
      20% due to the resignation of one of our Initial Stockholders, Donald B.
      Rix, from the Board of Directors.  An affiliate of Dr.
      Rix  purchased 97,474 shares of our common stock prior to the
      Company’s initial public offering and such affiliate continues to hold
      such shares, representing 0.9% of the Company, through the date of this
      proxy statement.
  Item 13 . CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  Prior to
Apex’s initial  public offering, Apex issued a total of 2,156,250
shares of common stock at an aggregate purchase price of $25,000, which shares
are currently held in escrow, by the individuals and entities set forth
below:
  Name
                    
                    Number
                      of Shares
                    
                    Relationship to UsInvivos
      Limited Partners
                    
                    268,858
                    
                    Affiliate
      of Darrell J. Elliott, Chairman, Chief Executive Officer and
      DirectorK.
      Michael Forrest
                    
                    472,803
                    
                    President,
      Chief Operating Officer and DirectorTreasure
      Road Partners Ltd.
                    
                    359,790
                    
                    Affiliate
      of Gary E. Frashier, Chief Financial Officer, Executive Vice President,
      Secretary and DirectorRobert
      J. Easton
                    
                    397,310
                    
                    DirectorJohn
      J. Chandler
                    
                    126,313
                    
                    DirectorNancy
      T. Chang
                    
                    183,951
                    
                    DirectorAnthony
      J. Sinskey
                    
                    97,474
                    
                    DirectorRobert
      L. Van Nostrand
                    
                    152,277
                    
                    DirectorRix
      Clinical Laboratories Ltd.
                    
                    97,474
                    
                    Affiliate
      of Donald B. Rix, Former DirectorTotal
                    
                    2,156,250
  20
  Immediately
prior to Apex’s initial public offering, all of our then current stockholders
purchased in a private placement 1,800,000 warrants at a price of $1.00 per
warrant (an aggregate purchase price of $1,800,000) directly from
Apex.  Such warrants were sold pursuant to the exemption from
registration contained in Section 4(2) of the Securities Act.  Each
purchaser of such warrants was an accredited investor (as defined in Rule 501(a)
of the Securities Act).  Each warrant entitles the holder to purchase
from Apex one share of common stock at an exercise price of $6.00 after the
later of the completion of a business combination with a target business and
June 7, 2008.
  The
Company’s headquarters are located at 18 Farm Lane, Hillsborough, California,
94010.  Apex Bioventures, LLC, an affiliate of K. Michael Forrest, the
Company’s President and one of the Company’s directors, provides office space to
the Company and has agreed that it will make such office space as the Company
may require from time to time available at no cost. We will reimburse our
officers and directors for any reasonable out-of-pocket business expenses
incurred by them in connection with certain activities on our behalf such as
identifying and investigating possible target businesses and business
combinations.  There is no limit on the amount of accountable
out-of-pocket expenses reimbursable by us, which will be reviewed only by our
Board of Directors or a court of competent jurisdiction if such reimbursement is
challenged.
  All
ongoing and future transactions between us and any of our officers and directors
or their respective affiliates, will be on terms believed by us to be no less
favorable to us than are available from unaffiliated third
parties.  Such transactions will require prior approval by a majority
of our uninterested “independent” directors (to the extent we have any) or the
members of our board who do not have an interest in the transaction, in either
case who had access, at our expense, to our attorneys or independent legal
counsel.  We will not enter into any such transaction unless our
disinterested “independent” directors (or, if there are no “independent”
directors, our disinterested directors) determine that the terms of such
transaction are no less favorable to us than those that would be available to us
with respect to such a transaction from unaffiliated third parties.
  Director
Independence
  Our Board
of Directors has determined that Robert J. Easton, Nancy T. Chang, John J.
Chandler, Anthony J. Sinskey, and Robert L. Van Nostrand are “independent
directors” as defined in Rule 10A-3 of the Exchange Act, and as defined by the
rules of the NYSE Amex.  The NYSE Amex also requires that a majority
of the audit committee consist of “independent directors.”  Currently,
all members of our audit committee are independent.
  Item
14:  Principal Accountant Fees and Services
  As previously disclosed in our Form 8-K
filing on January 17, 2008, certain of the partners of Goldstein Golub Kessler
LLP (“GGK”) became partners of McGladrey & Pullen, LLP
(M&P”).  As a result, GGK resigned as auditors of the Company
effective January 11, 2008 and M&P was appointed as auditors for the
Company’s annual financial statements for the year ended December 31,
2007.
  GGK had a continuing relationship with
RSM McGladrey, Inc. (“RSM”), from which it leased auditing staff who were full
time, permanent employees of RSM and through which its partners provided
non-audit services.  GGK had no full time employees and therefore,
none of the audit services performed were provided by permanent full time
employees of GGK.  GGK managed and supervised the audit staff, and is
exclusively responsible for the opinion rendered in connection with its
examination.
  The following table represents the
aggregate professional fees billed or expected to be billed during 2008 and 2007
by  M&P, RSM and GGK.
  Description
                      
                      2008
                      
                      
                      2007Audit
      Fees-M&P
                      
                      $
                      77,527
                      
                      
                      $
                      25,000Audit
      Fees - GGK
                      
                      
                      -
                      
                      
                      
                      83,500Audit-Related
      Fees
                      
                      
                      -
                      
                      
                      
                      -Tax
      Fees - RSM
                      
                      
                      8,000
                      
                      
                      
                      7,780All
      Other Fees
                      
                      
                      -
                      
                      
                      
                      -Total
      Fees
                      
                      $
                      85,527
                      
                      
                      $
                      116,280
 
 21
  Audit
Fees
  Audit
fees consist of fees for the audit of our 2008 and 2007 year end financial
statements included in reports on form 10-K, for the reviews of the interim
quarterly  financial statements  included in our quarterly
reports on Form 10-Q and services rendered in connection with our registration
statements, including related audits and proxy filings. Audit fees for 2007 also
included services related to the Initial public offering.
  Audit-Related
Fees
  We did
not incur audit-related fees for the years ended December 31, 2008 and
2007.
  Tax
Fees
  We
incurred tax-related fees from RSM for the preparation of state and federal tax
returns for the years ended December 31, 2008 and 2007.
  All
Other Fees
  We did
not incur any other fees during the years ended December 31, 2008 and
2007.
  Approval
of Independent Registered Public Accounting Firm Services and Fees
  The audit
committee is responsible for appointing, setting compensation, and overseeing
the work of the independent auditor.  In recognition of this
responsibility, the audit committee has established a policy to pre-approve all
audit and permissible non-audit services provided by the independent
auditor.
  22




PART IV




Item 15.
EXHIBITS, FINANCIAL STATEMENT
SCHEDULES.




The
exhibits and financial statement schedules filed as a part as a part of this
Form 10-K as follows:




(a)(1),
      (a)(2)
              Financial
      statements:See
      “Index to Consolidated Financial Statements and Financial Statement
      Schedules” at Item 8 to this Annual Report on Form 10-K. Other financial
      statement schedules have not been included because they are not applicable
      or the information is included in the financial statements or notes
      thereto.




(a)(3)
                ExhibitsThe
      following is a list of exhibits filed as part of this Annual Report on
      Form 10-K.




ExhibitNumber
                          
                          Description3.1†
                          
                          
                          Second
      Amended and Restated Certificate of Incorporation3.2†
                          
                          
                          Bylaws4.1†
                          
                          
                          Specimen
      Unit Certificate4.2†
                          
                          
                          Specimen
      Common Stock Certificate4.3†
                          
                          
                          Specimen
      Warrant Certificate4.4†
                          
                          
                          Form
      of Unit Purchase Option, granted to the underwriters4.5†
                          
                          
                          Form
      of Warrant Agreement between Continental Stock Transfer & Trust
      Company and the Registrant10.1†
                          
                          
                          Letter
      Agreements among the Issuer, the underwriters, and each of the Initial
      Stockholders10.2†
                          
                          
                          Form
      of Investment Management Trust Agreement between Continental Stock
      Transfer & Trust Company and the Registrant10.3†
                          
                          
                          Form
      of Securities Escrow Agreement between the Registrant, Continental Stock
      Transfer & Trust Company and the Initial Stockholders10.4†
                          
                          
                          Services
      Agreement between Apex Bioventures, LLC and the Registrant10.5†
                          
                          
                          Promissory
      Notes, dated June 15, 2006 and June 30, 2006, in each case, issued to
      Treasure Road Partners, Ltd.


23





10.6†
              
              
              Promissory
      Notes, dated June 15, 2006 and June 30, 2006, in each case, issued to
      Easton Associates, LLC10.7†
              
              
              Promissory
      Notes, dated June 15, 2006 and June 30, 2006, in each case, issued to K.
      Michael Forrest10.8†
              
              
              Promissory
      Note, dated April 9, 2007, issued to Robert J. Easton.10.9†
              
              
              Form
      of Registration Rights Agreement among the Registrant and the Initial
      Stockholders10.10†
              
              
              Insider
      Warrant Purchase Agreement among the Underwriters and the
      Registrant10.11†
              
              
              Form
      of Share Forfeiture Agreement among the Registrant and the Initial
      Stockholders10.12††
              
              
              Form
      of Termination of Services Agreement between Apex Bioventures, LLC and the
      Registrant10.13
              
              
              Form
      of Promissory Note, dated November 14, 2008, issued to each of the Initial
      Stockholders14.1@
              
              
              Code
      of Ethics31.1
              
              
              Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200231.2
              
              
              Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200232
              
              
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002









*
              
              
              Management
      contract or compensatory plan or arrangement.†
              
              
              Previously
      filed with the Commission as Exhibits to, and incorporated herein by
      reference from, the Company’s Registration Statement filed on Form S-1,
      File No. 333-135755.††
              
              
              Previously
      filed and incorporated herein by reference from the registrant’s Current
      Report on Form 10-K for the fiscal year ended December 31,
      2007.@
              
              
              Previously
      filed and incorporated herein by reference to the registrant’s Current
      Report on Form 8-K, dated June 19, 2007




24


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




APEX
      BIOVENTURES ACQUISITION CORPORATIONDate:
      March 27, 2009
                      By:
                      /s/
      Darrell J. ElliottDarrell
      J. Elliott, Chairman and Chief Executive
Officer




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities indicated below and on the dates indicated.





Signatures
                                  
                                  Title
                                  
                                  DateBy:
                                  /s/ Darrell J.
    Elliott
                                  
                                  Chief
      Executive Officer
                                  
                                  March
      27, 2009Darrell
      J. Elliott
                                  
                                  (principal
      executive officer) and DirectorBy:
                                  /s/ Gary E. Frashier
                                  
                                  Chief
      Financial Officer
                                  
                                  March
      27, 2009Gary
      E. Frashier
                                  
                                  (principal
      financial and accounting officer)By:
                                  /s/ K. Michael
    Forrest
                                  
                                  President,
      Chief Operating Officer,
                                  
                                  March
      27, 2009K.
      Michael Forrest
                                  
                                  DirectorBy:
                                  /s/ Robert J. Easton
                                  
                                  Director
                                  
                                  March
      27, 2009Robert
      J. EastonBy:
                                  /s/ John J. Chandler
                                  
                                  Director
                                  
                                  March
      27, 2009John
      J. ChandlerBy:
                                  /s/ Nancy T. Chang
                                  
                                  Director
                                  
                                  March
      27, 2009Nancy
      T. ChangBy:
                                  /s/ Anthony J.
    Sinskey
                                  
                                  Director
                                  
                                  March
      27, 2009Anthony
      J. SinskeyBy:
                                  /s/ Robert L. Van
      Nostrand
                                  
                                  Director
                                  
                                  March
      27, 2009Robert
      L. Van Nostrand







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and Stockholders of


Apex
Bioventures Acquisition Corporation


Hillsborough,
California




We have
audited the balance sheets of Apex Bioventures Acquisition Corporation (a
corporation in the development stage) as of December 31, 2008 and 2007, and the
related statements of operations, stockholders’ equity (deficiency), and cash
flows for each of the two years in the period ended December 31, 2008 and for
the cumulative period from June 1, 2006 (“Inception”) to December 31,
2008.  These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.  The financial statements
for the period from June 1, 2006 (inception) to December 31, 2006 were audited
by other auditors and our opinion, insofar as it relates to cumulative amounts
included for such prior periods, is based solely on the reports of such other
auditors.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Apex Bioventures Acquisition
Corporation as of December 31, 2008 and 2007, and the results of its operations
and its cash flows for each of the two years in the period ended December 31,
2008 and the amounts included in the cumulative period from  June 1,
2006 (inception) to December 31, 2008 in conformity with U.S. generally accepted
accounting principles.





We were
not engaged to examine management's assessment of the effectiveness of Apex
Bioventures Acquisition Corporation's internal control over financial reporting
as of December 31, 2008, included in the accompanying “Management’s Report on
Internal Control over Financial Reporting” and, accordingly, we do not express
an opinion thereon.




The
accompanying financial statements have been prepared assuming
that  Apex Bioventures Acquisition Corporation will continue as a
going concern. As discussed in Note 1 to the financial statements, the Company
will face a mandatory liquidation by June 13, 2009 if a business combination is
not consummated, which raises substantial doubt as to its ability to continue as
a going concern. The Company has determined that it will not be able to
consummate a business combination on or before June 13, 2009 and has approved
the dissolution and liquidation of the Company.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.





MCGLADREY
& PULLEN, LLP





New York,
New York


March 26,
2009


F-1




Apex
Bioventures Acquisition Corporation


(a
development stage company)


Balance
Sheet




December
      31,2008
                                  
                                  
                                  2007AssetsCurrent
      assetsCash
      and cash equivalents
                                  
                                  $
                                  52,844
                                  
                                  
                                  $
                                  1,060,427Investment
      held in trust
                                  
                                  
                                  65,584,847
                                  
                                  
                                  
                                  65,514,688Investment
      held in trust from underwriter
                                  
                                  
                                  2,070,000
                                  
                                  
                                  
                                  2,070,000Refundable
      income tax
                                  
                                  
                                  392,161
                                  
                                  
                                  
                                  -Prepaid
      expenses
                                  
                                  
                                  58,411
                                  
                                  
                                  
                                  66,244Total
      current assets
                                  
                                  
                                  68,158,263
                                  
                                  
                                  
                                  68,711,359Deferred
      tax asset, net
                                  
                                  
                                  318,691
                                  
                                  
                                  
                                  198,106Total
      assets
                                  
                                  $
                                  68,476,954
                                  
                                  
                                  $
                                  68,909,465Liabilities
      and Stockholders’ EquityCurrent
      liabilitiesAccounts
      payable and accrued expenses
                                  
                                  $
                                  140,854
                                  
                                  
                                  
                                  126,007Advances
      from stockholders
                                  
                                  
                                  18,551
                                  
                                  
                                  
                                  2,776Income
      taxes payable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  704,281Deferred
      interest
                                  
                                  
                                  224,069
                                  
                                  
                                  
                                  -Notes
      payable — stockholders
                                  
                                  
                                  78,284
                                  
                                  
                                  
                                  -Due
      to underwriter
                                  
                                  
                                  2,070,000
                                  
                                  
                                  
                                  2,070,000Total
      current liabilities
                                  
                                  
                                  2,531,758
                                  
                                  
                                  
                                  2,903,064Common
      stock subject to conversion (2,587,499 shares at conversion
      value)
                                  
                                  
                                  20,208,367
                                  
                                  
                                  
                                  20,208,367CommitmentsStockholders’
      equityPreferred
      stock, $0.0001 par value, 1,000,000 authorized shares, none
      issued
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      Stock, $0.0001 par value, 60,000,000 authorized;
                                    10,781,250
      (which includes 2,587,499 shares subject to possible
      conversion)
                                    issued
      and outstanding
                                  
                                  
                                  1,078
                                  
                                  
                                  
                                  1,078Additional
      paid-in capital
                                  
                                  
                                  45,152,355
                                  
                                  
                                  
                                  45,152,355Income
      accumulated during the development stage
                                  
                                  
                                  583,396
                                  
                                  
                                  
                                  644,601Total
      stockholders’ equity
                                  
                                  
                                  45,736,829
                                  
                                  
                                  
                                  45,798,034Total
      liabilities and stockholders’ equity
                                  
                                  $
                                  68,476,954
                                  
                                  
                                  $
                                  68,909,465




See
notes to financial statements.


F-2




Apex
Bioventures Acquisition Corporation


(a
development stage company)


Statements of
Operations




Year Ended
                    December 31, 2008
                  
                  
                  Year Ended
                    December 31,
                    2007
                  
                  
                  Period from
                    June 1, 2006
                    (Inception) to
                    December 31, 2008Formation
      and operating costs
                  
                  $
                  (1,223,452
                  )
                  
                  $
                  (581,816
                  )
                  
                  $
                  (1,858,656
                  )Dividend
      and interest income
                  
                  
                  1,174,027
                  
                  
                  
                  1,785,716
                  
                  
                  
                  2,960,807Income
      (loss) before provision for income taxes
                  
                  
                  (49,425
                  )
                  
                  
                  1,203,900
                  
                  
                  
                  1,102,151Provision
      for income taxes
                  
                  
                  (11,780
                  )
                  
                  
                  (506,975
                  )
                  
                  
                  (518,755
                  )Net
      Income (loss)
                  
                  $
                  (61,205
                  )
                  
                  $
                  696,925
                  
                  
                  $
                  583,396Net
      income (loss) per share - basic and diluted
                  
                  $
                  (0.01
                  )
                  
                  $
                  0.10Weighted
      average number of common sharesOutstanding
      - basic and diluted
                  
                  
                  10,781,250
                  
                  
                  
                  6,929,538




See
notes to financial statements.


F-3


Apex
Bioventures Acquisition Corporation


(a
development stage company)


Statements
of Stockholders’ Equity (Deficiency)


For the
period from June 1, 2006 (Inception) to December 31, 2008




Common Stock
                    
                    
                    Additional
                      Paid-In
                    
                    
                    Income
                      (Deficit)
                      Accumulated
                      During the
                      Development
                    
                    
                    Total
                      Stockholders’
                      EquityShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Stage
                    
                    
                    (Deficiency)Common
      shares issued on June 27, 2006 at $0.01159 per share
                    
                    
                    2,156,250
                    
                    
                    $
                    216
                    
                    
                    $
                    24,784
                    
                    
                    
                    -
                    
                    
                    $
                    25,000Net
      Loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    $
                    (52,324
                    )
                    
                    
                    (52,324
                    )Balances
      at December 31, 2006
                    
                    
                    2,156,250
                    
                    
                    
                    216
                    
                    
                    
                    24,784
                    
                    
                    
                    (52,324
                    )
                    
                    
                    (27,324
                    )Sale
      of private placement warrants
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,800,000
                    
                    
                    
                    -
                    
                    
                    
                    1,800,000Sale
      of 8,625,000 Units net of underwriters’ discount and offering expenses
      (includes 2,587,499 shares subject to conversion)
                    
                    
                    8,625,000
                    
                    
                    
                    862
                    
                    
                    
                    63,535,538
                    
                    
                    
                    -
                    
                    
                    
                    63,536,700Proceeds
      subject to forfeiture of 2,587,499 shares
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (20,208,367
                    )
                    
                    
                    -
                    
                    
                    
                    (20,208,367
                    )Sale
      of underwriter option
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    100
                    
                    
                    
                    -
                    
                    
                    
                    100Net
      income
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    696,925
                    
                    
                    
                    696,925Balances
      at December 31, 2007
                    
                    
                    10,781,250
                    
                    
                    $
                    1,078
                    
                    
                    $
                    45,152,355
                    
                    
                    $
                    644,601
                    
                    
                    $
                    45,798,034Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (61,205
                    )
                    
                    
                    (61,205
                    )Balances
      at December 31, 2008
                    
                    
                    10,781,250
                    
                    
                    $
                    1,078
                    
                    
                    $
                    45,152,355
                    
                    
                    $
                    583,396
                    
                    
                    $
                    45,736,829




See
notes to financial statements.


F-4




Apex
Bioventures Acquisition Corporation


(a
development stage company)


Statements of Cash
Flows





Year Ended
                        December 31, 2008
                      
                      
                      Year Ended
                        December 31,
                        2007
                      
                      
                      Period from June 1,
                        2006 (Inception) to
                        December 31, 2008Cash
      flows from operating activitiesNet
      income (loss)
                      
                      $
                      (61,205
                      )
                      
                      $
                      696,925
                      
                      
                      $
                      583,396Adjustments
      to reconcile net income (loss) to net cash used in operating
      activitiesDeferred
      income taxes
                      
                      
                      (120,585
                      )
                      
                      
                      (198,106
                      )
                      
                      
                      (318,691
                      )Interest  earned
      on trust account
                      
                      
                      (1,386,704
                      )
                      
                      
                      (1,773,142
                      )
                      
                      
                      (3,159,846
                      )Change
      in operating assets and liabilitiesPrepaid
      expenses
                      
                      
                      7,833
                      
                      
                      
                      (66,244
                      )
                      
                      
                      (58,411
                      )Accounts
      payable and accrued expenses
                      
                      
                      14,847
                      
                      
                      
                      105,210
                      
                      
                      
                      140,854Income
      taxes payable (refundable)
                      
                      
                      (1,096,442
                      )
                      
                      
                      704,281
                      
                      
                      
                      (392,161
                      )Deferred
      interest
                      
                      
                      224,069
                      
                      
                      
                      
                      
                      
                      
                      224,069Net
      cash used in operating activities
                      
                      
                      (2,418,187
                      )
                      
                      
                      (531,076
                      )
                      
                      
                      (2,980,790
                      )Cash
      flows from investing activitiesDisbursements
      from trust account
                      
                      
                      1,316,545
                      
                      
                      
                      1,518,454
                      
                      
                      
                      2,834,999Cash
      held in trust account
                      
                      
                      -
                      
                      
                      
                      (67,330,000
                      )
                      
                      
                      (67,330,000
                      )Net
      cash provided by (used in)  investing activities
                      
                      
                      1,316,545
                      
                      
                      
                      (65,811,546
                      )
                      
                      
                      (64,495,001
                      )Cash
      flows from financing activitiesProceeds
      from public offering
                      
                      
                      -
                      
                      
                      
                      69,000,000
                      
                      
                      
                      69,000,000Proceeds
      from private placement of warrants
                      
                      
                      -
                      
                      
                      
                      1,800,000
                      
                      
                      
                      1,800,000Proceeds
      from stockholders loans
                      
                      
                      78,284
                      
                      
                      
                      -
                      
                      
                      
                      303,284Repayment
      from stockholders loans
                      
                      
                      -
                      
                      
                      
                      (225,000
                      )
                      
                      
                      (225,000
                      )Proceeds
      from advances from stockholders
                      
                      
                      188,213
                      
                      
                      
                      146,895
                      
                      
                      
                      339,278Repayment
      of advances from stockholders
                      
                      
                      (172,438
                      )
                      
                      
                      (148,289
                      )
                      
                      
                      (320,727
                      )Proceeds
      from sale of option to underwriters
                      
                      
                      -
                      
                      
                      
                      100
                      
                      
                      
                      100Proceeds
      from the sale of common stock
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      25,000Payment
      of offering expenses
                      
                      
                      -
                      
                      
                      
                      (3,253,396
                      )
                      
                      
                      (3,393,300
                      ))Cash
      provided by financing activities
                      
                      
                      94,059
                      
                      
                      
                      67,320,310
                      
                      
                      
                      67,528,635Net
      increase (decrease) in cash and cash equivalents
                      
                      
                      (1,007,583
                      )
                      
                      
                      977,688
                      
                      
                      
                      52,844Cash
      and cash equivalents, beginning of period
                      
                      
                      1,060,427
                      
                      
                      
                      82,739
                      
                      
                      
                      -Cash
      and cash equivalents, end of period
                      
                      $
                      52,844
                      
                      
                      $
                      1,060,427
                      
                      
                      $
                      52,844Supplemental
      schedule of non cash financing activities:Accrual
      of offering costs
                      
                      $
                      -
                      
                      
                      $
                      9,797
                      
                      
                      $
                      -Accrual
      of deferred underwriting fees
                      
                      $
                      -
                      
                      
                      $
                      2,070,000
                      
                      
                      $
                      2,070,000Cash
      paid for:Income
      tax
                      
                      $
                      1,235,000
                      
                      
                      $
                      -
                      
                      
                      $
                      1,235,000Interest
                      
                      $
                      7,912
                      
                      
                      $
                      1,373
                      
                      
                      $
                      9,285




See
notes to financial statements.


F-5




Apex
Bioventures Acquisition Corporation


(a
development stage company)


Notes to
Financial Statements


December
31, 2008




Note
1 — Organization and Business Operations




Apex
Bioventures Acquisition Corporation (the “Company”) was incorporated in Delaware
on June 1, 2006. The Company was formed to acquire one or more domestic or
foreign operating businesses in the healthcare industry through a merger,
capital stock exchange, asset acquisition or other similar business combination.
All activities through December 31, 2008 relate to the Company’s formation and
public offering described below. The Company has neither engaged in any
operations nor generated significant revenue to date. The Company is considered
to be in the development stage and is subject to the risks associated with
activities of development stage companies.




The
registration statement for the Company’s initial public offering (the “Public
Offering”) (as described in Note 3) was declared effective on June 7, 2007. The
Company consummated the Public Offering on June 13, 2007 and received net
proceeds of approximately $65,300,000, including $1,800,000 of proceeds from the
private placement (the “Private Placement”) sale of 1,800,000 insider warrants
to our stockholders prior to the Public Offering (the “Initial Stockholders”).
The warrants sold in the Private Placement are identical to the warrants sold in
the Public Offering, except that such warrants are non-redeemable and can be
exercised on a cashless basis as long as these persons hold such warrants. In
addition, subject to certain limited exceptions, none of the warrants purchased
by the Initial Stockholders are transferable or salable until six months after
the consummation of a business combination.




The
Company’s management has broad discretion with respect to the specific
application of the net proceeds of the Public Offering, although substantially
all of the net proceeds of the Public Offering are intended to be generally
applied toward consummating a business combination with (or acquisition of) one
or more domestic or foreign operating businesses in the healthcare industry
(“Business Combination”), which may not constitute a business combination for
accounting purposes. Furthermore, there is no assurance that the Company will be
able to successfully effect a Business Combination. Upon the closing of the
Public Offering and Private Placement, $67,330,000, including $2,070,000 of
deferred underwriters’ discounts and commissions as described in Note 3, is
being held in a trust account (the “Trust Account”) invested in government
securities. The Trust Account will be maintained until the earlier of (i) the
consummation of the Company’s initial Business Combination and (ii) liquidation
of the Company. The placing of funds in the Trust Account may not protect those
funds from third party claims against the Company. Although the Company will
seek to have all vendors, prospective target businesses or other entities it
engages, execute agreements with the Company waiving any right, title, interest
or claim of any kind in or to any monies held in the Trust Account, there is no
guarantee that they will execute such agreements. Our Initial Stockholders have
agreed that they will be liable, on a joint and several basis, to cover claims
made by such third parties, but only if, and to the extent, the claims reduce
the amounts in the Trust Account available for payment to our public
stockholders in the event of a liquidation and the claims are made by a vendor
or service provider for services rendered, or products sold, to us or by a
prospective acquisition target. However, our Initial Stockholders will not have
any personal liability as to any claimed amounts owed to a third party who
executed a waiver (including a prospective acquisition target) or the
underwriters. However, there can be no assurance that the stockholders will be
able to satisfy those obligations. The remaining net proceeds (not held in the
Trust Account), along with $1,600,000 in dividend income net of taxes payable on
such dividends, may be used to pay for business, legal, accounting due diligence
on prospective acquisitions, negotiation with prospective targets and
satisfaction of closing conditions, and continuing general and administrative
expenses.





The
Company, after signing a definitive agreement for a Business Combination is
required to submit such transaction for stockholder approval. In the event that
stockholders owning 30% or more of the shares sold in the Public Offering vote
against the Business Combination and exercise their conversion rights described
below, the Business Combination will not be consummated. All of the Initial
Stockholders, have agreed to vote their 2,156,250 founding shares of common
stock, as well as any shares of common stock acquired in connection with or
following the Public Offering, in accordance with the vote of the majority in
interest of all other stockholders of the Company (“public stockholders”) with
respect to any Business Combination. After the consummation of a Business
Combination, these voting agreements will terminate.


F-6




With
respect to a Business Combination which is approved and consummated, any public
stockholder who voted against the Business Combination may demand that the
Company convert his or her shares to cash. The per share conversion price will
equal the amount in the Trust Account (including dividends, but less amounts
reserved or released to us for working capital and net of taxes payable),
calculated as of two business days prior to the consummation of the proposed
Business Combination divided by the number of shares of common stock held by
public stockholders at the consummation of the Public Offering. Accordingly,
public stockholders holding 29.99% of the aggregate number of shares owned by
all Public stockholders may seek conversion of their shares in the event of a
Business Combination. Such public stockholders are entitled to receive their per
share interest in the Trust Account (subject to distributions for working
capital and amounts paid or accrued for taxes) computed without regard to the
shares held by Initial Stockholders. Accordingly, a portion of the net proceeds
from the Public Offering (29.99% of the amount from the Public Offering that was
placed in the Trust Fund) has been classified as common stock subject to
possible conversion on the accompanying balance sheet.





The
Company’s Second Amended and Restated Certificate of Incorporation provides that
the Company will continue in existence only until 18 months from the date of the
consummation of the Public Offering, or 24 months from the consummation of the
Public Offering if certain extension criteria have been satisfied.





On
February 5, 2008, the Company entered into a merger agreement with Dynogen
Pharmaceuticals, Inc., or Dynogen, and certain other parties named
therein.  However, the Company and Dynogen mutually agreed to
terminate the merger on April 16, 2008 due to then-current market conditions,
particularly those for small capitalization public biotech companies, and the
Company resumed its search for a suitable business combination.  On
December 13, 2008, the Company entered into a non-binding letter of intent which
extended the Company’s deadline to complete a business combination to June 13,
2009 (24 months from the consummation of our Public Offering).  After
careful consideration, the Company’s Board of Directors decided not to go
forward with the transaction contemplated by the letter of
intent.  Due diligence related expense in 2008 for Dynogen of
$395,000, with an additional $150,000 for legal expenses, were incurred,
primarily, during the first quarter of 2008.





The
accompanying financial statements have been prepared assuming
that  Apex Bioventures Acquisition Corporation will continue as a
going concern.




On March
4, 2009, the Company’s Board of Directors determined that the Company would not
be able to consummate a business combination on or before June 13, 2009 and, as
required by our Second Amended and Restated Certificate of Incorporation,
approved the dissolution and liquidation of the Company.  In
accordance with the Second Amended and Restated Certificate of Incorporation,
the Board of Directors must now submit a plan of liquidation to our stockholders
for their approval.  Accordingly, subject to stockholder approval, the
Company will distribute to all of our public stockholders, in proportion to
their respective equity interests, an aggregate sum equal to the amount in the
Trust Account, inclusive of any interest (net of taxes payable), plus any
remaining net assets. Upon liquidation, it is likely that the per share value of
the residual assets remaining available for distribution (including Trust
Account assets) will be less than the per share price in the Public Offering
(assuming no value is attributed to the Warrants contained in the Units sold in
the Public Offering). The Company can not now estimate  the final
liquidation date, but expects the liquidation, subject to stockholder approval,
to be completed prior to June 13, 2009.





Note
2 — Summary of Significant Accounting Policies




Cash
and Cash Equivalents





Cash and
cash equivalents are deposits with financial institutions as well as short-term
money market instruments with maturities of three months or less when
purchased.




Concentration
of Credit Risk




Financial
instruments that potentially subject the Company to a significant concentration
of credit risk consist primarily of cash and cash equivalents. The Company may
maintain deposits in federally insured financial institutions in excess of
federally insured limits. The Company has not experienced any losses on these
accounts.


F-7




Fair Value of Financial
Instruments




The fair
values of the Company’s assets and liabilities that qualify as financial
instruments under SFAS No. 107 “Disclosures about Fair Value of Financial
Instruments,” approximate their carrying amounts presented in the balance sheets
at December 31, 2008 and 2007.




The
Company accounts for derivative instruments, if any, in accordance with SFAS No.
133 “Accounting for Derivative Instruments and Hedging Activities” as amended
(“SFAS 133”), which establishes accounting and reporting standards for
derivative instruments.




Deferred
Offering Costs




Deferred
offering costs consisted principally of accounting, legal and other fees
incurred prior to the Public Offering and were charged to capital upon the
consummation of the Public Offering.





Deferred
interest





Deferred
interest represents 29.99% of the excess interest earned on the investments held
in trust above the $1,600,000 allowable to be released to the Company to fund
working capital requirements, net of any income tax obligations.





Net
Income (Loss) per Common Share




Income
(loss) per share is computed by dividing the net income (loss) by the weighted
average number of common shares outstanding for the period. The effect of the
8,625,000 outstanding warrants issued in connection with the initial public
offering, the 1,800,000 outstanding warrants issued in connection with the
private placement and the 450,000 units included in the underwriters’ purchase
option has not been considered in diluted income (loss) per share calculations
since the warrants cannot be exercised until the later of the Company’s initial
Business Combination or June 7, 2008.




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of expenses during the
reporting period. Actual results could differ from those
estimates.


F-8




Income
Taxes




Deferred
income taxes are provided for the differences between the bases of assets and
liabilities for financial reporting and income tax purposes. A valuation
allowance is established when necessary to reduce deferred tax assets to the
amount expected to be realized.




New Accounting
Pronouncements




In
December 2007, the Financial Accounting Standards Board (“FASB”) released SFAS
141R, “Business Combinations” that is effective for business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The pronouncement
resulted from a joint project between the FASB and the International Accounting
Standards Board and continues the movement toward the greater use of fair values
in financial reporting. SFAS 141R is expected to significantly change how future
business acquisitions are accounted for.





In
December 2007, the Financial Accounting Standards Board released SFAS 160
“Non-controlling Interests in Consolidated Financial Statements” that is
effective for annual periods beginning December 15, 2008. The pronouncement
resulted from a joint project between the FASB and the International Accounting
Standards Board and continues the movement toward the greater use of fair values
in financial reporting.





In June
2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 07-5,
“Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity’s Own Stock” (“EITF 07-5”).  EITF 07-5 mandates a two-step
process for evaluating whether an equity-linked financial instrument or embedded
feature is indexed to the entity’s own stock.  It is effective for
fiscal years beginning after December 15, 2008 and interim periods within those
fiscal years, which is our first quarter of 2009.  Any outstanding
instrument at the date of adoption will require a retrospective application of
the accounting through a cumulative effect adjustment to retained earnings upon
adoption.  The Company is currently evaluating the impact that
adoption of EITF 07-5 will have on its financial statements.





In
September 2006 the Financial Accounting Standards Board  issued
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
(SFAS No. 157).  SFAS No. 157 defines fair value, establishes a framework
for measuring fair value, and expands disclosures about fair value
measurement.  SFAS No. 157 also emphasizes that fair value is a
market-based measurement, not an entity-specific measurement, and sets out a
fair value hierarchy with the highest priority being quoted prices in active
markets.  Under SFAS No. 157, fair value measurements are disclosed by
level within that hierarchy.  In February 2008, the FASB issued FASB Staff
Position No. 157-2, Effective Date of FASB Statement No. 157, which permits a
one-year deferral for the implementation of SFAS No. 157 with regard to
nonfinancial assets and liabilities that are not recognized or disclosed at fair
value in the financial statements on a recurring basis.  The Company
adopted SFAS No. 157 for the fiscal year beginning January 1, 2008, except for
nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis for
which delayed application is permitted until our fiscal year beginning January
1, 2009.  The Company is currently assessing the potential effect of the
adoption of the remaining provisions of SFAS No. 157 on its financial position,
results of operations and cash flows. The adoption of the remaining provisions
of SFAS No. 157 is not expected to have a material impact on the Company’s
financial position, results of operations or cash flows.





The
Company does not believe that any other recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying financial statements.


F-9


Note
3 — Initial Public Offering & Value of Unit Purchase Option




On June
13, 2007, the Company sold 8,625,000 units (“Units”), including 1,125,000 units
pursuant to the over-allotment option granted to the underwriters, in the Public
Offering at a price of $8.00 per unit. Each Unit consists of one share of the
Company’s common stock, $0.0001 par value, and one Common Stock Purchase Warrant
(“Warrant”). Each Warrant entitles the holder to purchase from the Company one
share of common stock at an exercise price of $6.00 commencing on the later of
the completion of a Business Combination with a target business and one year
from the effective date of the registration statement for the Public Offering
and expiring four years from the effective date of the Public Offering, unless
earlier redeemed. The Warrants will be redeemable at a price of $0.01 per
Warrant upon 90 days’ notice after the Warrants become exercisable, only in the
event that the last sale price of the common stock is at least $11.50 per share
for any 20 trading days within a 30 trading day period ending on the third
business day prior to the date on which notice of redemption is given. In
accordance with the warrant agreement relating to the Warrants sold and issued
in the Public Offering, the Company is only required to use its best efforts to
maintain the effectiveness of the registration statement covering the Warrants.
The Company will not be obligated to deliver securities, and there are no
contractual penalties for failure to deliver securities, if a registration
statement is not effective at the time of exercise. Additionally, in the event
that a registration is not effective at the time of exercise, the holder of such
Warrant shall not be entitled to exercise such Warrant and in no event (whether
in the case of a registration statement not being effective or otherwise) will
the Company be required to net cash settle the warrant exercise. As a result of
the expected liquidation as discussed in note 1, the Warrants will expire
unexercised and unredeemed.




In
connection with the Public Offering, the Company paid Lazard Capital Markets LLC
and Ladenburg Thalmann & Co. Inc., the underwriters of the Public Offering,
underwriting discounts and commissions of 7% of the gross proceeds of the Public
Offering, of which 3% of the gross proceeds ($2,070,000) are held in the Trust
Account and payable only upon the consummation of a Business Combination. If a
Business Combination is approved and completed, public stockholders who voted
against the combination and have exercised their conversion rights will be
entitled to their pro rata share of the deferred underwriters’ discount and
commissions.





Each of
the common stock and warrants began separate trading on June 20,
2007.




Simultaneously
with the consummation of the Public Offering, the Initial Stockholders purchased
1,800,000 warrants (“Private Placement Warrants”) at a purchase price of $1.00
per warrant, in a private placement. The proceeds of $1,800,000 were placed in
the Trust Account. The Private Placement Warrants are identical to the Warrants
underlying the Units sold in the Public Offering except that if the Company
calls the Warrants for redemption, the Private Placement Warrants will be
exercisable on a cashless basis as long as they are still held by the initial
purchasers. The purchasers have agreed that the Private Placement Warrants will
not be sold or transferred by them (other than to certain permitted transferees
who agree to be similarly bound), until six months after the completion of a
Business Combination.





The
Initial Stockholders and the holders of the Private Placement Warrants will be
entitled to registration rights with respect to their securities pursuant to an
agreement signed as of the effective date of the Public Offering. With respect
to the Private Placement Warrants (and underlying shares), from and after the
date on which the Company files a current report on Form 8-K announcing that it
has entered into a definitive agreement with respect to a Business Combination,
the holders of a majority of these securities are entitled to demand
registration of the resale of these securities. However, the Company is not
required to effect such registration until six months following the consummation
of a Business Combination. The Company filed a current report on Form 8-K
announcing that it had entered into a Merger Agreement with Dynogen
Pharmaceuticals, Inc. relating to a Business Combination. With respect to the
shares issued to the Initial Stockholders prior to the Public Offering and the
Private Placement Warrants (and underlying shares), from and after the first
anniversary of the consummation of the Business Combination, the holders of a
majority of these securities are entitled to demand registration of the resale
of these securities. In addition, such holders have certain “piggy back”
registration rights on registration statements filed subsequent to the Company’s
consummation of a Business Combination. The Company will bear the expenses
incurred in connection with the filing of any such registration
statements.


F-10


In
connection with this Offering, the Company issued an option to the underwriters,
for $100, to purchase up to a total of 450,000 Units at $10.00 per Unit. The
Units issuable upon exercise of this option are identical to those offered in
the Public Offering. The purchase option and its underlying securities have been
registered under the registration statement. The option has a useful life of
five years.




The sale
of the option was accounted for as an equity transaction. Accordingly, there was
no net impact on the Company’s financial position or results of operations,
except for the recording of the $100 proceeds from the sale. The Company has
determined, based upon a Black-Scholes model, that the fair value of the option
on the date of sale was approximately $1.35 million, using an expected life of
five years, volatility of 43% and a risk free interest rate of
4.75%.




The
volatility calculation of 43% is based on the actual volatilities of other
similarly situated blank check companies. Because the Company did not have a
trading history at the time of the issuance of the option, the Company needed to
estimate the potential volatility of its unit price, which will depend on a
number of factors which could not be ascertained at that time. Although an
expected life of five years was taken into account for the purposes of assigning
a fair value to the option, if the Company does not consummate a business
combination within the prescribed time period and liquidate the Trust Account as
part of any plan of dissolution and distribution approved by the Company’s
stockholders, the option would become worthless.





In April
2007, the Company effected a 1 for 1.086956522 reverse stock split of its
outstanding common stock (effectively increasing the price per share paid for
each share from $0.01067 to $0.01159). The accompanying financial statements
have been retroactively restated to reflect this reverse stock
split.





Note
4 — Related Party Transactions




In
June 2007, Treasure Road Partners, Ltd. (an entity controlled by Gary E.
Frashier and his wife, Giva H. Frashier), Darrell J. Elliott and K. Michael
Forrest advanced the Company $35,000, $16,666 and $22,668, respectively, to
partially fund the Company’s listing fee for the American Stock Exchange and
other working capital. These non-interest bearing advances were repaid upon
consummation of the Public Offering.




As of
December 31, 2008 and  2007, advances from stockholders were $18,551
and $2,776 respectively due to officers and directors for operating costs
incurred on behalf of the Company.




As of
February 5, 2008, Lauren Elliott, the daughter of Darrell J. Elliott, our
Chairman and Chief Executive Officer, entered into a consulting agreement with
the Company to provide certain administrative services.  Ms. Elliott
is paid approximately $1,667 per month (assuming two days work per
week).





As of
November 14, 2008, the Company issued promissory notes for $170,000 to our
Initial Stockholders, in aggregate of which $78,234 was received as of December
31, 2008, to provide ongoing working capital These notes are accruing interest
at a rate of 1.63% and will be payable upon the earlier of November 14, 2009, or
the Company’s liquidation and dissolution.


F-11


During a
portion of 2007 the Company occupied office space provided by Craig Drill
Capital, an affiliate of Robert J. Easton, a director of the Company. For the
year ended December 31, 2007 and the period from June 1, 2006 (date of
inception) to December 31, 2007, the Company paid Craig Drill Capital $3,500 for
rent and administrative expenses, which expenses are included in formation and
operating costs in the accompanying Statement of Operations. No rent was paid
during 2008.




The
Company currently occupies office space provided by Apex Bioventures, LLC, an
affiliate of K. Michael Forrest, an officer and director of the Company. For the
year ended December 31, 2007 and the period from June 1, 2006 (date of
inception) to December 31, 2007, the Company paid Apex Bioventures, LLC $6,000
for rent and administrative expenses, which expenses are included in formation
and operating costs in the accompanying Statements of Operations. No rent was
paid during 2008.




The
Company’s Initial Stockholders purchased an aggregate of 2,156,250 (2,343,750
shares prior to the reverse stock split) shares of our common stock in June
2006. Of the 2,156,250 shares issued, as adjusted for the reverse stock split,
281,250 shares were subject to forfeiture, without return of invested capital to
the stockholders, to the extent the underwriters’ over-allotment option was not
exercised in full. If any of the 281,250 shares of common stock held by the then
existing stockholders were forfeited, on the date of such forfeiture, the
Company would cancel such shares. None of the aforementioned shares were
forfeited since the underwriters’ over-allotment option was exercised in full,
as described in Note 3.





In
March 2007, the Company’s Board of Directors determined to reorganize the roles
of the Company’s management team so as to better reflect the officers’
respective talents. Commensurately, the Company’s stockholders determined to
re-allocate among themselves the Company’s outstanding shares of common stock.
The re-allocation was effected through the purchase and sale of shares for a
purchase price of $0.01067 per share.




In May
2007, the Company’s stockholders appointed Donald B. Rix as an additional member
of its Board of Directors. Commensurately, the Company’s stockholders determined
to re-allocate among themselves the Company’s outstanding shares of common
stock. The allocation was effected through the purchase and sale from each then
existing stockholder to Rix Clinical Laboratories Ltd. of shares for a purchase
price of $0.01159 per share.  Dr. Rix resigned from our Board of
Directors on May 27, 2008 for personal reasons.





Note 5 - Income
Taxes





In July
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48,”Accounting for Uncertainty in Income Taxes,” an
interpretation of FASB Statement No. 109 (“FIN 48”), which provides criteria for
the recognition, measurement, presentation and disclosure of an uncertain tax
position. A tax benefit from an uncertain position may be recognized only if it
is “more likely than not” that the position is sustainable based on its
technical merits. The provisions of FIN 48 are effective for fiscal years
beginning after December 15, 2006. The adoption of FIN 48 did not have a
material effect on the Company’s financial condition or results of
operations.


F-12




Deferred
income taxes are provided using the liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences.  Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.  Deferred tax
assets and liabilities are adjusted for the effects of the changes in tax laws
and rates of the date of enactment. When tax returns are filed, it is highly
certain that some positions taken would be sustained upon examination by the
taxing authorities, while others are subject to uncertainty about the merits of
the position taken or the amount of the position that would be ultimately
sustained.  The benefit of a tax position is recognized in the
financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will
be sustained upon examination, including the resolution of appeals or litigation
processes, if any.  Tax positions taken are not offset or aggregated
with other positions.  Tax positions that meet the
more-likely-than-not recognition threshold are measured as the largest amount of
tax benefit that is more than 50% likely of being realized upon settlement with
the applicable taxing authority.  The portion of the benefits
associated with tax positions taken that exceeds the amount measured as
described above is reflected as a liability for unrecognized tax benefits in the
accompanying balance sheet along with any associated interest and penalties that
would be payable to the taxing authorities upon examination. Interest and
penalties associated with unrecognized tax benefits, if any, will be classified
as additional taxes in the statement of operations.




The
Company has recorded a valuation allowance against the state deferred tax asset
since it cannot determine realizability for tax purposes and therefore cannot
conclude that the deferred tax asset is more likely than not recoverable at this
time.





The
provision for income taxes for the years ended December 31, 2008 and 2007
consist of the following:





December
      31,2008
                                
                                
                                2007Current:Federal
                                
                                $
                                92,069
                                
                                
                                $
                                559,532State
                                
                                
                                40,296
                                
                                
                                
                                145,549Total
      current
                                
                                
                                132,365
                                
                                
                                
                                705,081Deferred:Federal
                                
                                
                                (120,585
                                )
                                
                                
                                (198,106
                                )StateTotal
      deferred
                                
                                
                                (120,585
                                )
                                
                                
                                (198,106
                                )$
                                11,780
                                
                                
                                $
                                506,975




As of
December 31, 2008 and 2007, the tax effect of temporary differences that give
rise to the net deferred tax asset is as follows:




2008
                
                
                2007Expense
      deferred for income tax purposes
                
                $
                288,058
                
                
                $
                240,494Interest
      and dividends deferred for reporting purposes
                
                
                95,992
                
                
                
                -Valuation
      allowance
                
                
                (65,359
                )
                
                
                (42,388
                )$
                318,691
                
                
                $
                198,106


F-13


A
reconciliation of income taxes at the statutory federal income tax rate to net
income taxes included in the accompanying statements of operations for the years
ended December 31, 2008 and 2007 are as follows:




2008
                            
                            
                            2007Statutory
      U.S. federal rate
                            
                            
                            34.0
                            %
                            
                            
                            34.0
                            %State
      income taxes, net of federal effect
                            
                            
                            8.0
                            %
                            
                            
                            8.0
                            %Non-deductible
      expenses
                            
                            
                            (14.7
                            )%
                            
                            
                            0.4
                            %Valuation
      allowance
                            
                            
                            (51.1
                            )%
                            
                            
                            (0.3
                            )%Effective
      Tax Rate
                            
                            
                            (23.8
                            )%
                            
                            
                            42.1
                            %




Note
6 — Preferred Stock




The
Company is authorized to issue 1,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined from
time to time by the Company’s Board of Directors.




Note
7 — Reserved Common Stock




At
December 31, 2008, 11,325,000 shares of common stock were reserved for issuance
upon exercise of redeemable warrants and the underwriters’ purchase
option.




Note
8 — Investments Held in Trust





At
December 31, 2008, Investments Held in Trust were invested entirely in an
Institutional Class - Treasury Money Market Portfolio managed by Morgan
Stanley.    The average interest rate on invested funds
during the fourth quarter of 2008 was 1.9%.





The
Company adopted SFAS No. 157 on January 1, 2008, delaying, as permitted,
application for non-financial assets and non-financial
liabilities.  SFAS No. 157 establishes a framework for measuring fair
value, and expands disclosures about fair value measurements. SFAS No. 157
establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value into three levels, and requires that
assets and liabilities carried at fair value are classified and disclosed in one
of the following three categories:





Level 1:
quoted prices (unadjusted) in active markets for an identical asset or liability
that the Company has the ability to access as of the measurement
date.  Financial assets and liabilities utilizing Level 1 inputs
include active-exchange traded securities and exchange-based
derivatives.





Level 2:
inputs other than quoted prices included within Level 1 that are directly
observable for the asset or liability or indirectly observable through
corroboration with observable market data. Financial assets and liabilities
utilizing Level 2 inputs include fixed income securities, non-exchange based
derivatives, mutual funds, and fair-value hedges.





Level 3:
unobservable inputs for the asset or liability are only used when there is
little, if any, market activity for the asset or liability at the measurement
date. Financial assets and liabilities utilizing Level 3 inputs include
infrequently-traded non-exchange-based derivatives and commingled investment
funds, and are measured using present value pricing models.





In
accordance with SFAS No. 157, the Company determines the level in the fair value
hierarchy within which each fair value measurement falls in its entirety, based
on the lowest level input that is significant to the fair value measurement in
its entirety. In determining the appropriate levels, the Company performs an
analysis of the assets and liabilities that are subject to SFAS No. 157 at each
reporting period end.




F-14





The
Investments Held in Trust, as described above, is the only financial instrument
that is measured and recorded at fair value on the Company’s balance sheet on a
recurring basis. These money market securities are considered to be highly
liquid and easily tradable investments and are valued using inputs observable in
active markets for identical securities and,  therefore, are
classified as level 1 within  the fair value hierarchy.





Total
                    
                    
                    Level
      1
                    
                    
                    Level
      2
                    
                    
                    Level
      3Treasury MMF Portfolio held in Trust
                    
                    $
                    67,654,847
                    
                    
                    $
                    67,654,847
                    
                    
                    
                    -
                    
                    
                    
                    -





Note
9 – Commitments





On July
23, 2008, the Company entered into finders agreements with a third-party. The
agreements expire by their terms on April 30, 2009, but are terminable by either
party upon 15 days prior written notice. If either the Company or the
third-party introduces the other to a potential target with whom such other
party consummates a Business Combination, such other third-party is obligated to
pay the introducing party a success fee between 1% and 1.5% of the total value
of the transaction. Neither the Company nor the third-party is obligated to pay
the other any fee unless a Business Combination is consummated with a referred
target. In addition, the Company entered into two separate finders agreements
with third parties as of October 30, 2008 and November 3, 2008, respectively.
The agreements expired by their terms on December 13, 2008.





As of
December 31, 2008, the Company had unbilled legal fees of $924,124; the Company
expects to negotiate a settlement of its unpaid legal fees and expenses out of
any remaining available funds after liquidation and distribution.





Note
10 - Subsequent Events




On March
4, 2009, the Company’s Board of Directors determined that the Company would not
be able to consummate a business combination on or before June 13, 2009 and, as
required by our Second Amended and Restated Certificate of Incorporation,
approved the dissolution and liquidation of Apex.  In accordance with
the Second Amended and Restated Certificate of Incorporation, the Board of
Directors must now submit a plan of liquidation to our stockholders for their
approval.  Accordingly, subject to stockholder approval, the Company
will distribute to all of our public stockholders, in proportion to their
respective equity interests, an aggregate sum equal to the amount in the Trust
Account, inclusive of any interest (net of taxes payable), plus any remaining
net assets. Upon liquidation, it is likely that the per share value of the
residual assets remaining available for distribution (including Trust Account
assets) will be less than the per share price in the Public Offering (assuming
no value is attributed to the Warrants contained in the Units sold in the Public
Offering). The Initial Stockholders have waived their rights to participate in
any liquidation distribution with respect to shares of common stock owned by
them immediately prior to our Public Offering. There will be no distribution
from the Trust Account with respect to our warrants, which will expire
worthless.


F-15