**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 SECURITIESEXCHANGE
                ACT OF 1934 For the fiscal year
              ended **December
              31, 2007**




**OR**





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF
              1934 For 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
              registereCommon Stock, $.0001 Par Value Per
              Share
            American Stock ExchangeCommon Stock Purchase Warrants
            American Stock ExchangeUnits consisting of one share of Common
              Stock
              and one Warrant
            American Stock
              Exchange




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.  Yes
o
      No x









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.  Yes
oNo
x




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. Yes xNo
o




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.  Yes
xNo o




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




Large
      accelerated filer oAccelerated filer oNon-accelerated filer xSmaller reporting
      company o




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




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 29, 2007
      (the last business day of the registrant’s most recently completed second
      quarter), as reported on the American Stock Exchange, was approximately
      $62,359,000. As of February 27, 2008, 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**
              
              
              
              
              
              **6**ITEM
                  1
              
              
              BUSINESS
              
              
              6ITEM
                  1A.
              
              
              RISK
                  FACTORS
              
              
              14ITEM
                  1B.
              
              
              UNRESOLVED
                  STAFF COMMENTS
              
              
              34ITEM
                  2
              
              
              PROPERTIES
              
              
              35ITEM
                  3
              
              
              LEGAL
                  PROCEEDINGS
              
              
              35ITEM
                  4
              
              
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              
              35**PART
                  II**
              
              
              
              
              
              **36**ITEM
                  5
              
              
              MARKET
                  FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
                  PURCHASES OF EQUITY SECURITIES.
              
              
              36ITEM
                  6
              
              
              SELECTED
                  FINANCIAL DATA
              
              
              41ITEM
                  7
              
              
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS
              
              
              42ITEM
                  7A.
              
              
              QUANTITATIVE
                  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
              
              
              43ITEM
                  8
              
              
              FINANCIAL
                  STATEMENTS AND SUPPLEMENTARY DATA.
              
              
              44ITEM
                  9
              
              
              CHANGES
                  IN AND DISCLOSURE.DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND
                  FINANCIAL
              
              
              44ITEM
                  9A.
              
              
              CONTROLS
                  AND PROCEDURES.
              
              
              44ITEM
                  9B.
              
              
              OTHER
                  INFORMATION
              
              
              44**PART
                  III**
              
              
              
              
              
              **45**ITEM
                  10
              
              
              DIRECTORS,
                  EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
              
              
              45ITEM
                  11
              
              
              EXECUTIVE
                  COMPENSATION
              
              
              45ITEM
                  12
              
              
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS
              
              
              45ITEM
                  13
              
              
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                  INDEPENDENCE
              
              
              45ITEM
                  14
              
              
              PRINCIPAL
                  ACCOUNTING FEES AND SERVICES
              
              
              45**PART
                  IV**
              
              
              
              
              
              **46**ITEM
                  15
              
              
              EXHIBITS,
                  FINANCIAL STATEMENT SCHEDULES
              
              
              46




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.
      They also include statements about our pending merger with Dynogen
      Pharmaceuticals, Inc. (“Dynogen”). 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;




·
            The
                successful completion of the Dynogen
                merger;




·
            Legislation
                or regulatory issues. FDA requirements or other changes adversely
                affecting the business in which Dynogen is
                engaged;




·
            Dynogen’s
                management of clinical trials;




·
            Intensity
                of competition in the pharmaceutical industry;
                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, the search for a
      suitable business combination and negotiation of the proposed merger with
      Dynogen Pharmaceuticals, Inc., a Delaware corporation (“Dynogen”). As of the
      date of this filing, we have not acquired any business operations and have
      no
      operations generating product revenue.




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**




*Proposed
      Merger Agreement with Dynogen Pharmaceuticals, Inc.*




On
      February 5, 2008, we and our wholly-owned subsidiary Apex Acquisition Sub,
      Inc.,
      (“Acquisition Sub”) (incorporated in January 2008), entered into an Agreement
      and Plan of Merger (the “Merger Agreement”) with Dynogen and Kate Bingham and
      Michael Bigham, acting jointly as representatives of the holders of Dynogen
      capital stock, options, warrants and other securities, pursuant to which
      Acquisition Sub will merge with and into Dynogen and Dynogen will become our
      wholly-owned subsidiary (the “Merger”). Dynogen is a clinical-stage
      biopharmaceutical company focused on developing drugs to treat gastrointestinal
      (GI) and genitourinary (GU) disorders and diseases, specifically irritable
      bowel
      syndrome (IBS), nocturnal gastroesophageal reflux disease (NGERD) and overactive
      bladder (OAB). For some of these diseases, no approved treatment exists. The
      few
      treatment options approved by the U.S. Food and Drug Administration (FDA) have
      limited efficacy and side effects that range from bothersome to life
      threatening. Dynogen’s portfolio currently comprises the following three product
      candidates for multiple indications:




·
            **DDP733
                for IBS with constipation (IBS-c)**.
                Dynogen’s most advanced clinical-stage drug candidate, DDP733
                (pumosetrag), is being developed for the treatment of IBS. Dynogen
                is also
                developing DDP733 as a treatment for NGERD.




·
            **DDP225
                for IBS with diarrhea (IBS-d)**.
                Dynogen’s next clinical-stage drug candidate, DDP225, is being developed
                for the treatment of IBS.




·
            **DDP200
                for OAB**.
                Dynogen is developing DDP200 as a treatment for the non-incontinent
                form
                of OAB (OAB-Dry).




Following
      consummation of the Merger, it is anticipated that we will change our name
      to
“Dynogen Pharmaceuticals, Inc.” and Dynogen will change its name to “Dynogen,
      Inc.” Because we have no other operating business, following the Merger, Dynogen
      will effectively become a public company. Dynogen’s offices are located at 52
      Second Avenue, Waltham, Massachusetts 02451.




6




The
      Merger Agreement provides that by virtue of the Merger, Dynogen stockholders
      will initially receive an aggregate of approximately $98 million in shares
      of
      our common stock in exchange for all of the issued and outstanding capital
      stock
      of Dynogen. We are also assuming outstanding vested and unvested options and
      certain warrants to purchase Dynogen capital stock, which shall become options
      and warrants to purchase shares of our common stock on economically equivalent
      terms. As permitted under the Merger Agreement, since the signing thereof,
      Dynogen has incurred $5,000,000 of secured debt and may borrow up to an
      additional $5,000,000 on or before April 30, 2008. In connection with this
      secured debt, as permitted by the Merger Agreement, Dynogen issued warrants
      which, following the Merger will be exercisable for shares of our common stock.
      Dynogen is also permitted, under the Merger Agreement, to incur up to $25
      million of bridge financing prior to the consummation of the Merger. At the
      closing, the principal amount of any bridge notes issued by Dynogen in
      connection with bridge financing is to be converted into (a) shares of our
      common stock, plus (b) warrants to purchase shares of our common stock equal
      to
      25% of such principal amount. A per share value of $7.27 (representing the
      volume weighted average price for the 20 trading days immediately preceding
      the
      date of the Merger Agreement) will be used to determine the number of shares
      of
      our common stock to be issued in exchange for Dynogen capital stock and bridge
      notes and upon issuance of assumed options and warrants.




Under
      the
      Merger Agreement, holders of Dynogen’s capital stock and vested options will
      also be entitled to receive success fees upon the satisfaction of certain
      conditions, up to $46 million in shares of our common stock (again, based on
      a
      per share value of $7.27).




Dynogen
      stockholders holding over 80% of the outstanding voting capital stock have
      agreed, until the earlier of the consummation of the Merger or the termination
      of the Merger Agreement, (a) not to sell or otherwise transfer, except to
      certain permitted affiliate transferees who agree to be similarly bound, their
      shares of Dynogen capital stock (or options, warrants or other rights to acquire
      shares of Dynogen capital stock), and (b) to vote their shares of Dynogen
      capital stock in favor of the Merger, the Merger Agreement and the related
      agreements. These stockholders together control the only votes of the holders
      of
      any class or series of capital stock of Dynogen necessary to adopt the Merger
      Agreement and to approve the Merger and the related agreements. Further, certain
      key senior employees of Dynogen have agreed, through the 180th day following
      the
      consummation of the Merger, not to sell or otherwise transfer shares of our
      common stock or options, warrants or other rights to acquire shares of our
      common stock, except to certain permitted affiliate transferees who agree to
      be
      similarly bound. We have agreed to register for resale the shares of our common
      stock issued in connection with the Merger to those Dynogen stockholders who
      may, following the Merger, be considered our “affiliates” and who otherwise will
      not be able to sell their shares of our common stock in the absence of an
      exemption from registration.




A
      more
      complete description of the transactions described above, including exhibits
      related thereto, such as the Merger Agreement, is included in a Form 8-K filed
      on February 6, 2008 and will be included in our definitive proxy statement
      to be
      filed within 120 days of the end of our fiscal year.




*Initial
      Public Offering*




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”). 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 they
      are
      held by Initial Stockholders. In addition, subject to certain limited
      exceptions, none of the warrants purchased by our Initial Stockholders are
      transferable or salable until six months after the consummation of a business
      combination.




7




Our
      management has broad discretion with respect to the specific application of
      the
      net proceeds of the Public Offering. Upon the closing of the Public Offering
      and
      Private Placement, $67,330,000, including $2,070,000 of the underwriters’
deferred discounts and commissions, was deposited in a trust account (the “Trust
      Account”) and invested in government securities. The Trust Account will be
      maintained until the earlier of (a) the consummation of our first business
      combination, and (b) our liquidation. As of February 29, 2008, the amount held
      in the trust account, including $2,070,000 of underwriters’ deferred discounts
      and commissions was approximately $68,014,846. 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 personally 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. 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 and will continue to be used to pay for business, legal, and
      accounting due diligence on prospective acquisitions, continuing general and
      administrative expenses, negotiation and consummation of the contemplated merger
      with Dynogen.




The
      Company, after signing a definitive agreement for a business combination, is
      required to submit such transaction for stockholder approval. Accordingly,
      we
      are preparing a proxy statement soliciting such 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 of our other stockholders (“Public Stockholders”) with respect
      to any business combination. After the consummation of a business combination,
      these voting agreements will terminate.




After
      a
      business combination is approved and consummated, any Public Stockholder who
      voted against the business combination may demand that we convert his, her
      or
      its shares to cash. The per share conversion price will equal the amount in
      the
      Trust Account, 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.
      Public Stockholders holding up to 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). 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 Account) has been classified as common
      stock subject to possible conversion on the accompanying December 31, 2007
      balance sheet.




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 certain extension criteria have been satisfied. 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. In
      the
      event of 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).




8




On
      June
      8, 2007, our units commenced trading on the American Stock Exchange under the
      symbol “PEX.U”. On June 20, 2007, our common stock and warrants commenced
      trading separately on the American Stock Exchange under the symbols “PEX” and
“PEX.WS”, respectively




**Executive
      Officers of the Registrant as of December 31, 2007**




Our
      current executive officers are as follows:




**Darrell
      J. Elliott** ,
      age 61,
      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 and Chairman and acting Chief
      Executive Officer of ViRexx Medical Corp., a publicly traded biotechnology
      company. He is also a director of Tekmira Pharmaceuticals Corporation, a
      publicly traded biotechnology company.




**K.
      Michael Forrest** ,
      age 64,
      serves as our President and Chief Operating Officer. Additionally, he has served
      as one of our directors since our inception. Mr. Forrest is also Chairman of
      Apex Bioventures, LLC, an investment and consulting company focusing on emerging
      companies in the healthcare industry. He is a director of AVI BioPharma, Inc.
      and Tekmira Pharmaceuticals Corporation, each a publicly traded biotechnology
      company.




**Gary
      E. Frashier** ,
      age 71,
      serves 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. He is also a director
      of
      Tekmira Pharmaceuticals Corporation and Alseres Pharmaceuticals, Inc.,
      each a publicly traded biotechnology company.




**Our
      Activities since Completion of our Initial Public Offering**




Since
      our
      Public Offering we have not been, and as of December 31, 2007, we were not,
      engaged in any substantive commercial business. Instead, our sole activities
      have related to the search for a suitable business combination and the
      negotiation of the proposed Merger with Dynogen. 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
      the process, we received nominations for more than 204 companies. Over a four
      month period and following comprehensive discussions by our board of directors,
      this list was systematically reduced to approximately 30, and then 20, and
      eventually to approximately 10 companies on which we performed due diligence.
      Subject to the requirement that our initial business combination must be with
      a
      target business with a fair market value that is at least 80% of our net assets
      at the time of such acquisition, our management has virtually unrestricted
      flexibility in identifying and selecting a prospective target business. In
      evaluating a prospective target business (including Dynogen), our board of
      directors considered, among other factors, the following:




9




·
            clinical
                trial data and commercial product market
                size;




·
            experience
                and skill of management and availability of additional
                personnel;




·
            future
                capital requirements;




·
            competitive
                position of the target company and its
                products;




·
            barriers
                to entry of product candidates;




·
            stage
                of clinical development of products, processes or
                services;




·
            degree
                of current or potential market acceptance of the products, processes
                or
                services;




·
            proprietary
                features and degree of intellectual property or other protection
                of the
                products, processes or services;
                and




·
            FDA
                correspondence and regulatory environment of the
                industry.




In
      evaluating potential target companies, our board of directors considered a
      wide
      variety of factors in addition to those listed above. In light of the complexity
      of those factors, our board of directors, as a whole, attempted to quantify
      and
      assign relative importance to the specific factors it considered in reaching
      its
      decision. Individual members of our board of directors gave different weight
      to
      different factors.




In
      November 2007, following extensive due diligence, we began discussions in
      earnest with Dynogen concerning a possible business combination. In selecting
      Dynogen as a favored target, in addition to the above general considerations,
      our board of directors considered the nature of Dynogen’s business and assets,
      its current capitalization, the extent of the assets and liabilities to be
      assumed and the factors below:




·
            Dynogen
                has “multiple shots on goal” with three products in
                development.




·
            Dynogen
                has an advanced clinical pipeline of first-in-class treatments for
                the GI
                and GU markets, which we believe are also best-in-therapeutic for
                these
                areas.




·
            Dynogen
                is developing product opportunities in potential billion dollar markets
                where existing therapies have inadequate safety and
                efficacy.




·
            Three
                out of three of Dynogen’s clinical studies in 2007 yielded statistically
                significant positive results.




·
            Dynogen
                has an experienced management team with a strong track record of
                getting
                drugs to market.




·
            The
                involvement of certain blue-chip biotech investors of
                Dynogen.




On
      December 28, 2007, Apex and Dynogen entered into a non-binding term sheet and,
      began the preparation and negotiation of definitive documents. As a result
      of
      the continuing downward trend of small cap public biotechnology companies and
      market uncertainty, during the last week in January 2008, Apex and Dynogen
      agreed to restructure the terms of the proposed Merger. This restructuring
      resulted in the terms reflected in the Merger Agreement, including the up to
      $46
      million of success fees.




10




Any
      costs
      incurred with respect to the identification and evaluation of a prospective
      target business with which a business combination is not ultimately completed
      will result in a loss to us and reduce the amount of capital available to
      otherwise complete a business combination. While we may pay fees or compensation
      to third parties for their efforts in introducing us to a potential target
      business, in no event, however, will we pay any of our officers, directors
      or
      Initial Stockholders or any entity with which they are affiliated any finder’s
      fee or other compensation for services rendered to us prior to or in connection
      with the consummation of a business combination. In addition, none of our
      officers, directors or persons who were Initial Stockholders prior to our Public
      Offering will receive any finder’s fee, consulting fees or any similar fees from
      any person or entity in connection with any business combination involving
      us
      other than any compensation or fees that may be received for any services
      provided following such business combination.




**Fair
      market value of target business**




The
      initial target business that we acquire must have a fair market value equal
      to
      at least 80% of our net assets at the time of such acquisition. The fair market
      value of such business is determined by our board of directors based upon
      standards generally accepted by the financial community, such as actual and
      potential sales, earnings and cash flow and book value. We believe that the
      proposed acquisition of Dynogen satisfies this standard.




Our
      board
      of directors has determined that the total aggregate purchase price for Dynogen
      is at least equal to a fair market value of $98 million (assuming our common
      stock is valued at $7.27 per share). This determination was based on an analysis
      of Dynogen’s projected revenue and potential net profits and cash flow, as
      compared to other businesses of a similar nature and the acquisition multiples
      for other similar transactions in the biotechnology and pharmaceutical
      industries that have recently been publicly announced or completed. The
      estimated range of the fair market value exceeds $52.8 million, which is 80%
      of
      our net asset value of approximately $66.0 million as of December 31,
      2007.




In
      addition, our board obtained an opinion from RBC Capital Markets Corporation,
      an
      unaffiliated, independent investment banking firm which is a member of the
      National Association of Securities Dealers, Inc. with respect to the
      satisfaction of such criteria. The opinion obtained stated that fair market
      value of Dynogen is at least equal to 80% of the net asset value of Apex and
      that the consideration to be paid by us for Dynogen is fair to us from a
      financial point of view.




The
      terms
      of the proposed Merger were determined based upon arms-length negotiations
      between Apex and Dynogen, who had no prior dealings with each other. Under
      the
      circumstances, our board of directors believes that the total consideration
      to
      be paid appropriately reflects the fair market value of Dynogen. In light of
      the
      financial background and experience of several members of our board of
      directors, and considering the opinion of RBC Capital Markets Corporation,
      our
      board of directors has determined that the fair market value of Dynogen is
      greater than 80% of our net asset value.




**Stockholder
      approval of business combination**




Prior
      to
      the completion of the proposed Merger with Dynogen, we will submit the
      transaction to our stockholders for approval. In connection with seeking
      stockholder approval of the proposed Merger, we are preparing and will furnish
      our stockholders with proxy solicitation materials prepared in accordance with
      the Securities Exchange Act of 1934 (the “Exchange Act”), which, among other
      matters, will include a description of the operations of Dynogen and certain
      required financial information regarding the business. We plan to schedule
      a
      meeting of our stockholders to approve the Merger and certain related
      transactions.




11




In
      connection with the vote required for the proposed Dynogen Merger, all 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 Public Stockholders. We will proceed with the Merger only if
      a
      majority of the shares of common stock voted by the Public Stockholders are
      voted in favor of the Merger and Public Stockholders owning less than 30.0%
      of
      the shares sold in our Public Offering exercise their conversion rights.




**Conversion
      rights**




At
      the
      time we seek stockholder approval of any business combination, we will offer
      each Public Stockholder the right to have such stockholder’s shares of common
      stock converted to cash if the stockholder votes against the business
      combination and the business combination is approved and completed. The actual
      per-share conversion price will be equal to the amount in the Trust Account,
      inclusive of any interest but less amounts reserved or released to us for
      working capital or taxes (calculated as of two business days prior to the
      consummation of the proposed business combination), divided by the number of
      shares sold in our Public Offering. Without taking into any account interest
      earned on the Trust Account or taxes payable on such interest, the initial
      per-share conversion price would be $7.81 (or $0.19 less than the Public
      Offering per unit price of $8.00). An eligible stockholder may request
      conversion at any time after the mailing to our stockholders of the proxy
      statement and prior to the vote taken with respect to a proposed business
      combination at a meeting held for that purpose, but the request will not be
      granted unless the stockholder votes against the business combination and the
      business combination is approved and completed. Any request for conversion,
      once
      made, may be withdrawn at any time up to the date of the meeting. It is
      anticipated that the funds to be distributed to stockholders entitled to convert
      their shares who elect conversion will be distributed promptly after completion
      of a business combination. Public Stockholders who convert their stock into
      their share of the Trust Account still have the right to exercise the warrants
      that they received as part of the units in the Public Offering. We will not
      complete any business combination if Public Stockholders owning 30% or more
      of
      the shares sold in our Public Offering exercise their conversion
      rights.




Because
      the initial per share conversion price is $7.81 per share (plus any interest
      net
      of taxes payable), which is lower than the $8.00 per unit price paid in our
      Public Offering and which may be lower than the market price of our common
      stock
      on the date of the conversion, there may be a disincentive on the part of Public
      Stockholders to exercise their conversion rights.




**Liquidation
      if no business combination**




If
      we do
      not complete a business combination by June 13, 2009, we will be dissolved,
      subject to stockholder approval, and 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. 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. If we dissolve, 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 personally
      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.




12




If
      we
      complete the proposed Dynogen Merger or enter into another letter of intent,
      an
      agreement in principle or a definitive agreement to complete a business
      combination prior to the expiration of 18 months after the consummation of
      the
      Public Offering, but are unable to complete the business combination within
      the
      18-month period, then we will have an additional six months in which to complete
      the business combination contemplated by the letter of intent, agreement in
      principle or definitive agreement. The Merger Agreement with Dynogen qualified
      us to extend the period in which we may consummate a business combination for
      this additional six-month period. If we are unable to do so by June 13, 2009,
      we
      will then liquidate. 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 anticipate that our instruction to the trustee would be given
      promptly after the expiration of the 24-month period.




Our
      Public Stockholders shall be entitled to receive funds from the Trust Account
      only in the event of our liquidation or, if we consummate a business
      combination, to the extent that Public Stockholders vote against the business
      combination and elect to convert their respective shares into cash. In no other
      circumstances shall a stockholder have any right or interest of any kind to
      or
      in the trust fund. Voting against the business combination alone will not result
      in conversion of a stockholder’s shares into a pro rata share of the Trust
      Account. Such stockholder must have also exercised his, her or its conversion
      rights described above.




**Employees**




As
      of
      December 31, 2007, 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. Our officers have
      devoted a significant amount of time to the proposed Merger with Dynogen. We
      have not and do not intend to have any full time employees prior to the
      consummation of a business combination.




**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.




13




**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, 2007, 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**




***We
      are a recently formed company with no operating history and, accordingly, you
      will not have any basis on which to evaluate our ability to achieve our business
      objective.***




We
      are a
      recently formed company with no operating results to date. Since we do not
      have
      any operations or an operating history, you have no basis upon which to evaluate
      our ability to achieve our business objective, which is to complete a business
      combination. We will not generate any revenues or income (other than interest
      income on the proceeds of our Public Offering) until, at the earliest, after
      the
      consummation of a business combination. On February 5, 2008, we entered into
      the
      Merger Agreement with Dynogen. We cannot assure you, however, that the Merger
      contemplated thereby will be consummated.




***Unlike
      many other blank check companies, we allow up to approximately 29.99% of our
      public stockholders to exercise their conversion rights. This higher threshold
      will make it easier for us to consummate a business combination with which
      you
      may not agree, and you may not receive the full amount of your original
      investment upon exercise of your conversion rights.***




When
      we
      seek stockholder approval of a business combination (including the Dynogen
      Merger), we will offer each Public Stockholder the right to have his, her or
      its
      shares of common stock converted to cash if the stockholder votes against the
      business combination and the business combination is approved and consummated.
      We will consummate the initial business combination only if the following two
      conditions are met: (a) a majority of the shares of common stock voted by the
      Public Stockholders are voted in favor of the business combination and (b)
      Public Stockholders owning 30% or more of the shares sold in this offering
      do
      not vote against the business combination and exercise their conversion rights.
      Most other blank check companies have a conversion threshold of 20%, which
      makes
      it more difficult for such companies to consummate their initial business
      combination. Thus, because we permit a larger number of stockholders to exercise
      their conversion rights, it will be easier for us to consummate an initial
      business combination with a target business which you may believe is not
      suitable for us, and you may not receive the full amount of your original
      investment upon exercise of your conversion rights.




***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.***




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, if we do not effect a business combination by June 13, 2009.
      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.




14




***If
      we are 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.***




If
      we are
      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 if we liquidate before the
      completion of a business combination.




***Because
      there are numerous companies with a business plan similar to ours seeking to
      effectuate a business combination, it may be more difficult for us to complete
      a
      business combination.***




Based
      upon publicly available information as of the date of this filing, approximately
      152 similarly structured blank check companies have completed initial public
      offerings since August 2003 and numerous others have filed registration
      statements. Of these companies, only 46 companies have consummated a business
      combination, while 24 other companies have announced they have entered into
      a
      definitive agreement for a business combination, but have not consummated such
      business combination. Accordingly, there are approximately 73 blank check
      companies with approximately $13.7 billion in trust that are seeking to carry
      out a business plan similar to our business plan. While some of those companies
      have specific industries in which they must complete a business combination,
      a
      number of them may consummate a business combination in any industry they
      choose. We may therefore be subject to competition from these and other
      companies seeking to consummate a business plan similar to ours which will,
      as a
      result, increase demand for privately-held companies to combine with companies
      structured similarly to ours. Further, the fact that only 46 such companies
      have
      completed a business combination and 24 such companies have entered into a
      definitive agreement for a business combination may be an indication that there
      are only a limited number of attractive target businesses available to such
      entities or that many privately-held target businesses may not be inclined
      to
      enter into business combinations with publicly held blank check companies like
      us. We cannot assure you that we will be able to consummate the Dynogen Merger
      and, if the Merger is not consummated, that we will be able to successfully
      compete for another attractive business combination. Additionally, because
      of
      this competition, we cannot assure you that we will be able to effectuate a
      business combination by June 13, 2009. If we are unable to find a suitable
      target business by such time, we will be forced to liquidate.




15




***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.




***We
      may issue shares of our capital stock or debt securities to complete a business
      combination, which would reduce the equity interest of our stockholders and
      likely cause a change in control of our ownership.***




Our
      Second Amended and Restated Certificate of Incorporation authorizes the issuance
      of up to 60,000,000 shares of common stock, par value $0.0001 per share, and
      1,000,000 shares of preferred stock, par value $0.0001 per share. As of the
      date
      hereof, there are 37,893,750 authorized but unissued shares of our common stock
      available for issuance (after appropriate reservation for the issuance of shares
      upon full exercise of our outstanding warrants and the underwriters warrants)
      and all of the 1,000,000 shares of preferred stock available for issuance.
      We
      will issue a substantial number of additional shares of our common stock to
      complete our proposed business combination with Dynogen, which
      issuance:




·
            will
                significantly reduce the equity interest of current investors in
                our
                securities;




·
            will
                cause a change in control, which may affect, among other things,
                our
                ability to use our net operating loss carry forwards, if any;
                and




·
            may
                adversely affect prevailing market prices for our common
                stock.




If
      the
      proposed Dynogen Merger is not consummated, but we issue additional shares
      of
      our capital stock in an alternative business combination, the above are still
      likely to occur. Additionally, the healthcare industry is capital intensive,
      traditionally using substantial amounts of indebtedness to finance acquisitions,
      capital expenditures and working capital needs. As permitted by the Merger
      Agreement, Dynogen has incurred $5 million of secured indebtedness and may
      incur
      up to an additional $5 million of secured indebtedness. This indebtedness or
      other indebtedness we incur to finance the purchase of assets or operations
      through the issuance of debt securities, could result in:




·
            default
                and foreclosure on our assets if our operating revenues after a business
                combination prove insufficient to pay our debt
                obligations;




·
            acceleration
                of our obligations to repay the indebtedness even if we have made
                all
                principal and interest payments when due if the debt security contains
                covenants that require the maintenance of certain financial ratios
                or
                reserves and any such covenant were breached without a waiver or
                renegotiation of that covenant;




16




·
            our
                immediate payment of all principal and accrued interest, if any,
                if the
                debt security is payable on demand; and our inability to obtain additional
                financing, if necessary, if the debt security contains covenants
                restricting our ability to obtain additional financing while such
                security
                is outstanding.




***Our
      ability to effect a business combination and to execute any potential business
      plan afterwards will be totally dependent upon the efforts of our key personnel,
      some of whom may join us following a business combination and whom we would
      have
      only a limited ability to evaluate. It is also likely that some of our officers
      and directors will resign upon the consummation of a business
      combination.***




Our
      ability to effect a business combination will be totally dependent upon the
      efforts of our key personnel. Under the Merger Agreement with Dynogen, four
      of
      our current directors will remain with us post-closing. Beyond this, the future
      role of our key personnel following a business combination, however, cannot
      presently be fully ascertained. In our proxy statement to our stockholders
      soliciting approval for the proposed Merger with Dynogen, we will, pursuant
      to
      the terms of the Merger Agreement, nominate for election to our board of
      directors, Lee R. Brettman, Dynogen’s Chief Executive Officer, and four of
      Dynogen’s current directors. Following a business combination (with Dynogen or
      otherwise), we may employ other personnel following the business combination.
      While we intend to closely scrutinize any additional individuals we engage
      after
      a business combination, we cannot assure you that our assessment of these
      individuals will prove to be correct. If we acquire a target business in an
      all-cash transaction, it would be more likely that current members of management
      would remain with us if they chose to do so. If a business combination were
      structured as a merger whereby the stockholders of the target company were
      to
      control the combined company following a business combination (as the proposed
      Merger with Dynogen is structured), it may be less likely that management would
      remain with the combined company unless it was negotiated as part of the
      transaction via the acquisition agreement, an employment agreement or other
      arrangement. In making the determination as to whether current management should
      remain with us following the business combination, management will analyze
      the
      experience and skill set of the target business’ management and negotiate as
      part of the business combination that certain members of current management
      remain if it is believed that it is in the best interests of the combined
      company post-business combination. If management negotiates to be retained
      post-business combination as a condition to any potential business combination,
      such negotiations may result in a conflict of interest.




***Our
      officers and directors may allocate their time to other businesses thereby
      causing conflicts of interest in their determination as to how much time to
      devote to our affairs. This could have a negative impact on our ability to
      consummate a business combination.***




Our
      officers and directors are not required to commit their full time to our
      affairs, which may result in a conflict of interest in allocating their time
      between our operations and other businesses. We do not intend to have any full
      time employees prior to the consummation of a business combination. Each of
      our
      officers are engaged in several other business endeavors and are not obligated
      to contribute any specific number of hours per week to our affairs.




If
      our
      officers’ other business affairs require them to devote more substantial amounts
      of time to such affairs, it could limit their ability to devote time to our
      affairs and could have a negative impact on our ability to consummate a business
      combination.




***Our
      officers and directors are currently affiliated with entities engaged in
      business activities similar to those intended to be conducted by us and
      accordingly, may have conflicts of interest in determining which entity a
      particular business opportunity should be presented to.***




17




Prior
      to
      our selection of Dynogen as a potential target, none of our officers or
      directors had any affiliation with Dynogen, nor did Dynogen create conflicts
      of
      interest as a potential acquisition candidate with respect to any other entity
      with which any of our officers or directors are affiliated. However, our
      officers and directors may in the future become affiliated with other entities,
      including other “blank check” companies, engaged in business activities similar
      to those intended to be conducted by us. Additionally, our officers and
      directors may become aware of business opportunities which may be appropriate
      for presentation to us as well as the other entities with which they are or
      may
      be affiliated. Further, certain of our officers and directors are currently
      involved in other businesses that are similar to the business activities that
      we
      intend to conduct following a business combination. Due to these existing
      affiliations, they have prior fiduciary obligations to present potential
      business opportunities to those entities prior to presenting them to us which
      could cause additional conflicts of interest. Accordingly, they have conflicts
      of interest in determining to which entity a particular business opportunity
      should be presented.




***All
      of our directors own shares of our common stock which will not participate
      in
      liquidation distribution and therefore they may have a conflict of interest
      in
      determining whether a particular target business is appropriate for a business
      combination.***




All
      of
      our directors own shares of our common stock which were issued prior to our
      Public Offering, but have waived their right to receive distributions with
      respect to those shares upon our liquidation if we are unable to complete a
      business combination. Additionally, our officers and directors have purchased
      an
      aggregate of 1,800,000 warrants in a Private Placement. These warrants will
      not
      be exercisable or sold until the consummation of a business combination. The
      shares and warrants owned by these directors will be worthless if we do not
      consummate a business combination. The personal and financial interests of
      these
      directors may influence their motivation in identifying and selecting a target
      business and completing a business combination in a timely manner. Consequently,
      these directors’ discretion in identifying and selecting a suitable target
      business may result in a conflict of interest when determining whether the
      terms, conditions and timing of a particular business combination are
      appropriate and in our stockholders’ best interest.




***Our
      officers and directors will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the funds
      available to us outside of the Trust Account unless the business combination
      is
      consummated and there are sufficient funds for reimbursement after such
      consummation; therefore they may have a conflict of
      interest.***




Our
      officers and directors will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the funds
      available to us outside of the Trust Account unless the business combination
      is
      consummated and there are sufficient funds for reimbursement after such
      consummation. The financial interest of such persons could influence their
      motivation in selecting a target business and thus, there may be a conflict
      of
      interest when determining whether a particular business combination is in the
      stockholders’ best interest.




***It
      is probable that we will only be able to complete one business combination,
      which will cause us to be solely dependent on a single business.***




The
      gross
      proceeds from our Public Offering, including proceeds from the Private
      Placement, were $70,800,000, of which $67,330,000 was placed in trust for use
      in
      consummating a business combination. Our initial business combination must
      be
      with a business with a fair market value of at least 80% of our net assets
      at
      the time of such acquisition or merger. Consequently, it is probable that we
      will have the ability to complete only a single business combination, although
      this may entail the simultaneous acquisition of several assets or closely
      related operating businesses at the same time. We currently contemplate that,
      following the Merger with Dynogen, the trust funds (after payment of costs
      and
      expenses incurred in connection with the Merger and other indebtedness) will
      be
      used to fund the operations of the combined company and not for an additional
      acquisition. Accordingly, whether we consummate the contemplated Merger with
      Dynogen or an alternative single business combination, the prospects for our
      ability to effect our business strategy may be:




18




·
            solely
                dependent upon the performance of a single business;
                or




·
            dependent
                upon the development or market acceptance of a single or limited
                number of
                products, processes or services.




In
      this
      case, we will not be able to diversify our operations or benefit from the
      possible spreading of risks or offsetting of losses, unlike other entities
      which
      may have the resources to complete several business combinations in different
      industries or different areas of a single industry. Furthermore, since our
      business combination may entail the simultaneous acquisition of several assets
      or operating businesses at the same time and may be with different sellers,
      we
      will need to convince such sellers to agree that the purchase of their assets
      or
      businesses is contingent upon the simultaneous closings of the other
      acquisitions.




***We
      may be unable to obtain additional financing, if required, to complete a
      business combination or to fund the operations and growth of the target
      business, which could compel us to restructure the transaction or abandon a
      particular business combination.***




If
      the
      net proceeds of our Public Offering and interest available to us for working
      capital are insufficient to effect the contemplated Dynogen Merger (or, if
      applicable, an alternative business combination), we will be required to seek
      additional financing. We cannot assure you that such financing would be
      available on acceptable terms, if at all. To the extent that additional
      financing proves to be unavailable when needed to consummate a particular
      business combination, we would be compelled to restructure the transaction
      or
      abandon that particular business combination and seek an alternative target
      business candidate. In addition, if we consummate a business combination, we
      may
      require additional financing to fund the operations or growth of the target
      business. The failure to secure additional financing could have a material
      adverse effect on the continued development or growth of the target business.
      None of our officers, directors or stockholders is required to provide any
      financing to us in connection with or after a business combination.




***Initial
      Stockholders, including our officers and directors, control a substantial
      interest in us and thus may influence certain actions requiring stockholder
      vote.***




Upon
      consummation of our offering, our Initial Stockholders (including all of our
      officers and directors or their affiliates collectively owned 20.0% of our
      issued and outstanding shares of common stock, not including an aggregate of
      1,800,000 warrants purchased in a Private Placement, which are not currently
      exercisable. These warrants cannot be exercised or sold until after consummation
      of a business combination.




Our
      board
      of directors is divided into three classes, each of which will generally serve
      for a term of three years with only one class of directors being elected in
      each
      year. It is unlikely that there will be an annual meeting of stockholders to
      elect new directors prior to the consummation of a business combination, in
      which case all of the current directors will continue in office at least until
      the consummation of the business combination. If there is an annual meeting,
      as
      a consequence of our “staggered” board of directors, initially only a minority
      of the board of directors will be considered for election and persons who were
      stockholders prior to our initial public offering, because of their ownership
      position, will have considerable influence regarding the outcome. Accordingly,
      our Initial Stockholders will continue to exert control at least until the
      consummation of a business combination. In addition, such stockholders and
      their
      affiliates and relatives are not prohibited from purchasing our securities
      in
      the open market. If they do, we cannot assure you that our Initial Stockholders
      will not have considerable influence upon the vote in connection with a business
      combination.




19




***Our
      outstanding warrants may have an adverse effect on the market price of common
      stock and make it more difficult to effect a business combination.***




In
      connection with the Public Offering and the Private Placement, we issued
      warrants to purchase an aggregate of 10,425,000 shares of common stock. In
      addition, we agreed to sell to the underwriters an option to purchase up to
      an
      aggregate of 450,000 units that, if exercised, would result in the issuance
      of
      an additional 450,000 units, comprised of 450,000 shares of common stock and
      450,000 warrants (assuming the option is not exercised on a cashless basis).
      These warrants become exercisable upon the consummation of our business
      combination. To the extent we issue shares of common stock to effect a business
      combination (as contemplated in connection with the Dynogen Merger), the
      potential for the issuance of substantial numbers of additional shares upon
      exercise of these warrants could make us a less attractive acquisition vehicle
      in the eyes of a target business, as such securities, when exercised, will
      increase the number of issued and outstanding shares of our common stock and
      reduce the value of the shares issued to complete the business combination.
      Accordingly, our warrants may make it more difficult to effect a business
      combination or increase the cost of the target business. Additionally, the
      sale,
      or even the possibility of sale, of the shares underlying the warrants could
      have an adverse effect on the market price for our securities or on our ability
      to obtain future public financing. If and to the extent these warrants are
      exercised, you may experience dilution to your holdings.




***The
      exercise of registration rights may have an adverse effect on the market price
      of our common stock and the existence of certain of these rights may make it
      more difficult to effect a business combination.***




Our
      Initial Stockholders are entitled to demand that we register the resale of
      the
      shares of common stock they acquired prior to our Public Offering at any time
      after the date on which their shares are released from escrow, which, except
      in
      limited circumstances, will occur upon the expiration of one year after a
      business combination is completed or any time after six months from the
      consummation of a business combination, if the volume weighted average price
      of
      our common stock equals or exceeds $11.50 per share for any 20 trading days
      within a 30 trading day period. Furthermore, they are entitled to demand the
      registration of the securities underlying the 1,800,000 founder warrants at
      any
      time after the date on which the warrants are released from escrow, which,
      except in limited circumstances, will occur upon the expiration of six months
      after the completion of a business combination. If our Initial Stockholders
      exercise their registration rights with respect to all of their shares of common
      stock and warrants, then there will be an additional 3,956,250 shares of common
      stock eligible for trading in the public market (assuming the warrants are
      not
      exercised on a cashless basis). Additionally, in connection with the proposed
      Merger with Dynogen, we intend to grant certain registration rights to
      stockholders of Dynogen who, following the Merger, will become our affiliates
      and will not be able to sell their shares of our common stock without the
      registration of such resale or an exemption therefrom. If the Merger with
      Dynogen in consummated, we will endeavor to register the resale of the shares
      of
      our common stock issued to such affiliates as merger consideration. While we
      cannot at this time ascertain the exact number of such shares, based on the
      number of shares of Dynogen capital stock held by Dynogen’s stockholders as of
      the signing of the Merger Agreement, we anticipate registering for resale
      approximately 5.7 million shares of our common stock. The presence of these
      additional securities eligible for trading in the public market may have an
      adverse effect on the market price of our common stock.




20




The
      existence of our Initial Stockholders’ registration rights may make it more
      difficult to effect a business combination or increase the cost of the target
      business, as the stockholders of the target business may be discouraged from
      entering into a business combination with us or request a higher price for
      their
      securities as a result of these registration rights and the potential future
      effect their exercise may have on the trading market for our common
      stock.




***The
      American Stock Exchange 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 American Stock Exchange, a national securities
      exchange. We cannot assure you that our securities will continue to be listed
      on
      the American Stock Exchange in the future prior to a business combination.
      Additionally, in connection with our business combination, it is likely that
      the
      American Stock Exchange may require us to file a new initial listing application
      and meet its initial listing requirements as opposed to its more lenient
      continued listing requirements. We cannot assure you that we will be able to
      meet those initial listing requirements at that time.




If
      the
      American Stock Exchange 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
      American Stock Exchange, 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.




***If
      our common stock becomes subject to the SEC’s penny stock rules, broker-dealers
      may experience difficulty completing customer transactions and trading activity
      in our securities may be adversely affected.***




If
      at any
      time our securities are no longer listed on the American Stock Exchange or
      another exchange or quoted on NASDAQ and we have net tangible assets of
      $5,000,000 or less and our common stock has a market price per share of less
      than $5.00, transactions in our common stock may be subject to the “penny stock”
rules promulgated under the Exchange Act. Under these rules, broker-dealers
      who
      recommend such securities to persons other than institutional accredited
      investors must:




21




·
            make
                a special written suitability determination for the
                purchaser;




·
            receive
                the purchaser’s prior written agreement to a
                transaction;




·
            provide
                the purchaser with risk disclosure documents which identify certain
                risks
                associated with investing in “penny stocks” and which describe the market
                for these “penny stocks” as well as a purchaser’s legal remedies;
                and




·
            obtain
                a signed and dated acknowledgment from the purchaser demonstrating
                that
                the purchaser has actually received the required risk disclosure
                document
                before a transaction in a “penny stock” can be
                completed.




If
      our
      common stock becomes subject to these rules, broker-dealers may find it
      difficult to effectuate customer transactions and trading activity in our
      securities may be adversely affected. As a result, the market price of our
      securities may be depressed, and you may find it more difficult to sell our
      securities.




***If
      we are deemed to be an investment company under the Investment Company Act
      of
      1940, our activities may be restricted which, among other problems, may make
      it
      difficult for us to complete a business combination. Such restrictions
      include:***




·
            restrictions
                on the nature of our investments;
                and




·
            restrictions
                on the issuance of securities.




In
      addition, we may have imposed upon us burdensome requirements,
      including:




·
            registration
                as an investment company;




·
            adoption
                of a specific form of corporate structure;
                and




·
            reporting,
                record keeping, voting, proxy and disclosure requirements and other
                rules
                and regulations.




We
      do not
      believe that our anticipated principal activities will subject us to the
      Investment Company Act of 1940. To this end, the proceeds held in trust may
      only
      be invested by the trust agent in “government securities” with specific maturity
      dates, or in money market funds meeting specific requirements under the
      Investment Company Act of 1940. By restricting the investment of the proceeds
      to
      these instruments, we intend to meet the requirements for the exemption provided
      in Rule 3a-1 promulgated under the Investment Company Act of 1940. If we were
      deemed to be subject to the act, compliance with these additional regulatory
      burdens would require additional expense that we have not allotted
      for.




***Our
      directors may not be considered “independent” under the policies of the North
      American Securities Administrators Association, Inc.***




All
      of
      our officers or directors own shares of our common stock, and no salary or
      other
      compensation will be paid to our officers or directors for services rendered
      by
      them on our behalf prior to or in connection with a business combination. We
      believe that two members of our board of directors are “independent” as that
      term is commonly used. However, under the policies of the North American
      Securities Administrators Association, Inc., because our directors may receive
      reimbursement for out-of-pocket expenses incurred by them in connection with
      activities on our behalf such as identifying potential target businesses and
      performing due diligence on suitable business combinations, state securities
      administrators could take the position that such individuals are not
“independent.” If this were the case, they would take the position that we would
      not have the benefit of independent directors examining the propriety of
      expenses incurred on our behalf and subject to reimbursement. Additionally,
      there is no limit on the amount of out-of-pocket expenses that could be incurred
      and there will be no review of the reasonableness of the expenses by anyone
      other than our board of directors, which would include persons who may seek
      reimbursement, or a court of competent jurisdiction if such reimbursement is
      challenged. Although we believe that all actions taken by our directors on
      our
      behalf will be in our best interests, whether or not two of them are deemed
      to
      be “independent,” we cannot assure you that this will actually be the case. If
      actions are taken, or expenses are incurred that are actually not in our best
      interests, it could have a material adverse effect on our business and
      operations and the price of our common stock.




22




***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.




***We
      may not be able to consummate a business combination within the required time
      frame, in which case, we will be forced to dissolve and liquidate.***




We
      must
      complete a business combination with one or more operating businesses with
      a
      collective fair market value equal to at least 80% of our net assets (excluding
      deferred underwriting discounts and commissions of $2,070,000) by June 13,
      2009.
      If we fail to complete a business combination within the required time frame
      we
      will promptly initiate procedures to dissolve and liquidate our assets. We
      may
      not be able to close the proposed Merger with Dynogen or find a suitable
      alternative target businesses within the required time frame. In addition,
      our
      negotiating position and our ability to conduct adequate due diligence on any
      potential target may be reduced as we approach the deadline for the consummation
      of a business combination.




23




**RISKS
        ASSOCIATED WITH THE HEALTHCARE INDUSTRY**


Whether
      we acquire domestic or international assets or operations, of which no
      assurances can be given, our proposed business will be subject to numerous
      risks, including the following:




***If
      we are unable to comply with governmental regulations affecting the healthcare
      industry, it could negatively affect our operations.***




There
      is
      extensive government regulation of many healthcare businesses as well as various
      proposals at the federal government level to reform the healthcare system.
      Changes to the existing regulatory framework and/or implementation of various
      reform initiatives could adversely affect certain sectors of the healthcare
      industry. If we are unable to adhere to these requirements, it could result
      in
      the imposition of penalties and fines against us, and could also result in
      the
      imposition of restrictions on our business and operations. For a more complete
      discussion of the government regulations applicable to the healthcare industry,
      please see the section entitled “Proposed Business—Government Regulations”
below.




***If
      we are required to obtain governmental approval of our products following a
      business combination (as in the case of a Merger with Dynogen), the production
      of our products could be delayed and we could be required to engage in a lengthy
      and expensive approval process that may not ultimately be
      successful.***




Unanticipated
      problems may arise in connection with the development of new products or
      technologies, and many such efforts may ultimately be unsuccessful. In addition,
      testing or marketing products may require obtaining government approvals, which
      may be a lengthy and expensive process with an uncertain outcome. Delays in
      commercializing products may result in the need to seek additional capital,
      potentially diluting the interest of investors. These various factors may result
      in abrupt advances and declines in the securities prices of particular companies
      in the healthcare industry and, in some cases, may have broad effect on the
      prices of securities of specific healthcare companies or of companies in the
      healthcare industry generally.




***The
      healthcare industry is susceptible to significant liability exposure, especially
      product liability claims. If liability claims are brought against us following
      a
      business combination, it could materially adversely affect our
      operations.***




Any
      target business we acquire in the healthcare industry will be exposed to
      potential liability risks (especially product liability risks) that are inherent
      in the testing, manufacturing, marketing and sale of healthcare products and/or
      the provisions of healthcare services. Product liability claims could delay
      or
      prevent completion of development programs, result in a recall of products
      or
      change in indications, or otherwise adversely affect our business, financial
      condition or market prices of our securities. Any liability claim brought
      against us following a business combination, with or without merit, could result
      in:




·
            liabilities
                that substantially exceed our liability insurance, which we would
                then be
                required to pay from other sources, if
                available;




·
            an
                increase of our liability insurance rates or the inability to maintain
                insurance coverage in the future on acceptable terms, or at
                all;




·
            withdrawal
                of patients enrolled in our clinical trials, if
                any;




·
            damage
                to our reputation and the reputation of our products or services,
                resulting in lower sales;




24




·
            regulatory
                investigations that could require costly product recalls or
                modifications;




·
            litigation
                costs; and




·
            the
                diversion of management’s attention from managing our
                business.




Additionally,
      liability insurance is becoming increasingly expensive. Although we currently
      maintain directors' and officers' liability insurance, as a result of increasing
      costs, we may be unable to continue to maintain this coverage or to obtain
      other sufficient insurance at a reasonable cost to protect us against losses
      that could have a material adverse effect on our business. Our inability to
      maintain or obtain liability insurance at an acceptable cost or to
      otherwise protect against potential liability claims could prevent or inhibit
      the commercialization of our products or services.




***If
      we are unable to obtain and maintain protection for the intellectual property
      relating to our technologies and products or services following a business
      combination, the value of our technology, products or services may be decreased
      and our revenues may be likewise decreased.***




Intellectual
      property rights in the fields of biotechnology, pharmaceuticals, diagnostics
      and
      medical devise is highly uncertain and involves complex legal and scientific
      questions. At the same time, the profitability of companies in these fields
      generally depends on sustained competitive advantages and differentiation that
      are based on intellectual property. Our success following a business combination
      (including a business combination with Dynogen) will depend in large part on
      our
      ability to obtain and maintain protection in the United States and other
      countries for the intellectual property covering or incorporated into our
      technology products or services. We may not be able to obtain additional issued
      patents relating to our technology, products or services. Even if issued,
      patents may be challenged, narrowed, invalidated or circumvented, which could
      limit our ability to stop competitors from marketing similar products or
      services, limit the length of term of patent protection we may have for our
      products or services, and expose us to substantial litigation costs and drain
      our resources. Changes in either patent laws or in interpretation of patent
      laws
      in the Untied States and other countries may diminish the value of our
      intellectual property or narrow the scope of our patent protection.




***If
      our prospective business infringes on the rights of third parties, we could
      be
      prevented from selling products, forced to pay damages, and may have to defend
      against litigation.***




In
      the
      event that the products, methods, processes or other technologies of our
      prospective business are claimed to infringe the proprietary rights of other
      parties, we could incur substantial costs and may be required to:




·
            obtain
                licenses, which may not be available on commercially reasonable terms,
                if
                at all;




·
            abandon
                an infringing product, process or
                technology;




·
            redesign
                our products, processes or technologies to avoid
                infringement;




·
            stop
                using the subject matter claimed in the patents held by
                others;




·
            defend
                litigation or administrative proceedings;
                or




·
            pay
                damages.




***Our
      investments in healthcare-related companies may be extremely risky and we could
      lose all or part of our investments.***




25





An
      investment in healthcare-related companies (including Dynogen) may be extremely
      risky relative to an investment in companies operating in other sectors due,
      in
      part, to the following factors:




·
            early
                stage healthcare companies typically have limited operating histories,
                narrow research and development capabilities, narrow potential product
                lines, are usually focused exclusively on development of potential
                products and technologies, and, like Dynogen, most have not yet reached
                the stage of product
                commercialization;




·
            to
                the extent that early stage healthcare companies are actually
                commercializing products, they generally have smaller market shares
                than
                larger businesses, which tend to render them more vulnerable to
                competitors’ actions and market
                conditions;




·
            early
                stage healthcare companies generally have less predictable operating
                results, may from time to time be parties to litigation, may be engaged
                in
                rapidly changing businesses with product candidates subject to a
                substantial risk of failure, and may require substantial additional
                capital to support their operations, finance expansion or maintain
                their
                competitive position;




·
            because
                many smaller healthcare companies tend to be privately owned, there
                is
                generally little publicly available information about these businesses;
                therefore, we may not learn all of the material information we need
                to
                know regarding these businesses;
                and




·
            many
                small healthcare companies are more likely to depend on the management
                talents and efforts of a small group of persons; therefore, the death,
                disability, resignation or termination of one or more of these persons
                could have a material adverse impact on the operations of any
                healthcare-related company we may
                acquire.




***Changes
      in the healthcare industry are subject to various influences, each of which
      may
      affect our prospective business.***




The
      healthcare industry is subject to changing political, economic, and regulatory
      influences. These factors affect the purchasing practices and operations of
      healthcare organizations. Any changes in current healthcare financing and
      reimbursement systems could cause us to make unplanned enhancements of our
      prospective products, or result in delays or cancellations of orders, or in
      the
      revocation of endorsement of our prospective products by clients. Federal and
      state legislatures have periodically considered programs to reform or amend
      the
      U.S. healthcare system at both the federal and state level. Such programs may
      increase governmental regulation or involvement in healthcare, lower
      reimbursement rates, or otherwise change the environment in which healthcare
      industry participants operate. Healthcare industry participants may respond
      by
      reducing their investments or postponing investment decisions, including
      investments in our prospective products.




Many
      healthcare industry participants are consolidating to create integrated
      healthcare systems with greater market power. As the healthcare industry
      consolidates, competition to provide products to industry participants may
      become even more intense, as will the importance of establishing a relationship
      with each industry participant. These industry participants may try to use
      their
      market power to negotiate price reductions for our prospective products. If
      we
      were forced to reduce our prices, our operating results could suffer if we
      could
      not achieve corresponding reductions in our expenses.




***Any
      business we acquire will be subject to extensive government regulation. Any
      business changes to the laws and regulations governing our prospective business,
      or the interpretation and enforcement of those laws or regulations, could cause
      us to modify our operations and could negatively impact our operating
      results.***




26




Our
      prospective business will be extensively regulated by the federal government
      and
      any states in which we decide to operate. The laws and regulations governing
      our
      operations, if any, are generally intended to benefit and protect persons other
      than our stockholders. The government agencies administering these laws and
      regulations have broad latitude to enforce them. These laws and regulations
      along with the terms of any government contracts we may enter into would
      regulate how we do business, what products we could offer, and how we would
      interact with the public. These laws and regulations, and their interpretations,
      are subject to frequent change. Changes in existing laws or regulations, or
      their interpretations, or the enactment of new laws or regulations could reduce
      our revenue, if any, by:




·
            imposing
                additional research requirements, thereby delaying the launch of
                potential
                new products and increasing
                expenses;




·
            increasing
                our liability;




·
            increasing
                our administrative and other costs;




·
            increasing
                or decreasing mandated benefits;




·
            forcing
                us to restructure our relationships with providers or partners;
                or




·
            requiring
                us to implement additional or different programs and
                systems.




An
      example of recently enacted and far-reaching legislation is the Medicare
      Prescription Drug, Improvement and Modernization Act of 2003, which will have
      very significant effects in greatly increasing the level of federal expenditures
      for prescription drugs. The new legislation alters the nature and degree of
      reimbursement for drugs. Any analogous requirements applied to our prospective
      products would be costly to implement and could affect our prospective
      revenues.




The
      current administration’s issuance of new regulations, its enforcement of the
      existing laws and regulations, the states’ ability to promulgate stricter rules,
      and uncertainty regarding many aspects of the regulations may make compliance
      with any new regulatory landscape difficult. In order to comply with any new
      regulatory requirements, any prospective business we acquire may be required
      to
      employ additional or different programs and systems, the costs of which are
      unknown to us at this time. Further, compliance with any such new regulations
      may lead to additional costs that we have not yet identified. We do not know
      whether, or the extent to which, we would be able to recover our costs of
      complying with any new regulations. Any new regulations and the related
      compliance costs could have a material adverse effect on our
      business.




***If
      we are unable to attract qualified healthcare professionals at reasonable costs,
      it could limit our ability to grow, increase our operating costs and negatively
      impact our business.***




We
      may
      rely significantly on our ability to attract and retain qualified healthcare
      professionals who possess the skills, experience and licenses necessary to
      meet
      the certification requirements and the requirements of applicable state and
      federal governing bodies. We will compete for qualified healthcare professionals
      with other healthcare organizations, universities, hospitals and government
      organizations.




27




Our
      ability to attract and retain such qualified healthcare professionals will
      depend on several factors, including our ability to provide attractive
      assignments and competitive benefits and wages. We cannot assure you that we
      will be successful in any of these areas.




***We
      may be dependent on payments from Medicare and Medicaid. Changes in the rates
      of
      methods governing these payments for our prospective products, or delays in
      such
      payments, could adversely affect our prospective
      revenue.***




Any
      reductions in amounts paid by government programs for our prospective products
      or changes in methods or regulations governing payments would adversely affect
      our potential revenue. Additionally, delays in any such payments, whether as
      a
      result of disputes or for any other reason, would also adversely affect our
      potential revenue.




If
      our
      costs were to increase more rapidly than payment adjustments we receive from
      Medicare, Medicaid or other third-party payors for any of our potential
      products, our revenue could be negatively impacted. Accordingly, our revenue
      may
      be largely dependent on our ability to manage costs of providing such
      products.




***We
      may depend on payments from third-party payors, including managed care
      organizations. If these payments are reduced, eliminated or delayed, our
      prospective revenues could be adversely affected.***




We
      may be
      dependent upon private sources of payment for any of our potential products
      or
      research services. Any amounts that we may receive in payment for such products
      or services may be adversely affected by market and cost factors as well as
      other factors over which we have no control, including regulations and cost
      containment and utilization decisions and reduced reimbursement schedules of
      third-party payors. Any reductions in such payments, to the extent that we
      could
      not recoup them elsewhere, would have a material adverse effect on our
      prospective business and results of operations. Additionally, delays in any
      such
      payments, whether as a result of disputes or for any other reason, would have
      a
      material adverse effect on our prospective business and results of
      operations.




***If
      the FDA or other state or foreign agencies impose regulations that affect our
      potential products, our costs will increase.***




The
      development, testing, production and marketing of any of our potential products
      that we may manufacture, market or sell following a business combination
      (including Dynogen’s products following consummation of the proposed Merger) may
      be subject to regulation by the FDA as “drugs.” All “new drugs” must be the
      subject of an FDA-approved new drug application (NDA) and all new biologics
      products must be the subject of a biologics license application (BLA) before
      they may be marketed in the United States. All generic equivalents to previously
      approved drugs or new dosage forms of existing drugs must be the subject of
      an
      FDA-approved abbreviated new drug application (ANDA) before they may be marketed
      in the United States. In all cases, the FDA has the authority to determine
      what
      testing procedures are appropriate for a particular product and, in some
      instances, has not published or otherwise identified guidelines as to the
      appropriate procedures. The required product testing and approval process for
      new drugs and biologics ordinarily takes several years and requires the
      expenditure of substantial resources. Testing of any product under development
      may not result in a commercially viable product. Even after such time and
      expenses, regulatory approval by the FDA may not be obtained for any products
      developed. Even if regulatory approval is obtained, a marketed product, its
      manufacturer and its manufacturing facilities are subject to continual review
      and periodic inspections. Subsequent discovery of previously unknown problems
      with a product, manufacturer or facility may result in restrictions on the
      product or manufacturer, including withdrawal of the product from the
      market.




28




Even
      if
      required FDA approval has been obtained with respect to a new drug or biologic
      product, foreign regulatory approval of a product must also be obtained prior
      to
      marketing the product internationally. Foreign approval procedures vary from
      country to country and the time required for approval may delay or prevent
      marketing. Although there is now a centralized European Union approval mechanism
      for new pharmaceutical products in place, each European Union member state
      may
      nonetheless impose its own procedures and requirements, many of which are time
      consuming and expensive, and some European Union member states require price
      approval as part of the regulatory approval process. Thus, there can be
      substantial delays in obtaining required approval from both the FDA and foreign
      regulatory authorities.




The
      regulatory requirements applicable to any new drug or biologic product may
      be
      modified in the future. We cannot determine what effect changes in regulations
      or statutes or legal interpretations may have on a product in the future. Any
      changes or new legislation could have a material adverse effect on our ability
      to develop and sell new drug and biologics products and, therefore, our ability
      to generate revenue and cash flow from them.




***The
      FDA and state authorities have broad enforcement powers. The FDA can impose
      civil and criminal enforcement actions and other penalties on us if we were
      to
      fail to comply with stringent FDA regulations. Our failure to comply with
      applicable regulatory requirements could result in enforcement action by the
      FDA
      or state agencies, which may include any of the following
      sanctions:***




·
            warning
                letters, fines, injunctions, consent decrees and civil
                penalties;




·
            repair,
                replacement, refunds, recall or seizure of our
                products;




·
            operating
                restrictions or partial suspension or total shutdown of
                production;




·
            refusal
                of requests for approval of new products, new intended uses, or
                modifications to existing products;




·
            withdrawal
                of market approvals previously granted;
                and




·
            criminal
                prosecution.




If
      any of
      these events were to occur, it could harm our business.




***Medical
      manufacturing facilities must maintain records, which are available for FDA
      inspectors documenting that the appropriate manufacturing procedures were
      followed.***




Should
      we
      acquire such a facility as a result of a business combination, the FDA would
      have authority to conduct inspections of such a facility. Labeling and
      promotional activities are also subject to scrutiny by the FDA and, in certain
      instances, by the Federal Trade Commission. Any failure by us to take
      satisfactory corrective action in response to an adverse inspection or to comply
      with applicable FDA regulations could result in enforcement action against
      us,
      including a public warning letter, a shutdown of manufacturing operations,
      a
      recall of our products, civil or criminal penalties or other sanctions. From
      time to time, the FDA may modify such requirements, imposing additional or
      different requirements that could require us to alter our business.




29




**RISKS
      RELATED TO THE POTENTIAL MERGER**




***The
      combined company’s working capital could be reduced and, following the Merger,
      our stockholders could own less than 40% of our outstanding common stock.***




Pursuant
      to our Second Amended and Restated Certificate of Incorporation, holders of
      shares issued in our Public Offering may vote against the proposed Merger with
      Dynogen and demand that we convert their shares into a pro rata share of the
      amount held in the Trust Account (including the amount held in the trust account
      representing the deferred portion of the underwriters’ fee), inclusive of any
      interest earned on such pro rata share (net of taxes payable). We will not
      complete the Merger if holders of 30% or more of the shares of common stock
      issued in our Public Offering vote against the Merger and exercise these
      conversion rights. To the extent the Merger is completed and holders of less
      than 30% of the shares of our common stock issued in the Public Offering have
      properly demanded to convert their shares, there will be a corresponding
      reduction in the amount of funds available to the combined company following
      the
      Merger and a reduction in the aggregate percentage of our outstanding shares
      that is owned after the Merger by our stockholders immediately prior to the
      Merger. As of February 29, 2008, assuming the Merger proposal is approved,
      the
      maximum amount of funds that could be disbursed to our stockholders upon the
      exercise of the conversion rights (excluding deductions for tax payments)
      without implicating the ability to complete the Merger will be approximately
      $20.4 million, or approximately 29.99% of the funds currently held in trust.
      If
      the maximum amount of funds were disbursed, the percentage of our outstanding
      common stock that would be owned by our existing stockholders who did not
      exercise their conversion right would be approximately 37.8%, based on the
      relative numbers of shares outstanding of our common stock and Dynogen common
      stock and other securities as of February 5, 2008.




***Pursuant
      to the terms of the Merger Agreement, a substantial number of shares will be
      issued upon, and will be potentially issuable after, the consummation of the
      Merger, which will result in significant dilution to our stockholders
      immediately prior to the Merger.***




As
      of
      February 5, 2008, 10,781,250 shares of our common stock were outstanding. Upon
      the consummation of the Merger, we will issue approximately 13.5 million shares,
      and reserve for issuance approximately 7.4 million additional shares of our
      common stock for future issuance upon the satisfaction of certain milestones
      and
      the exercise of options and warrants assumed or issued in connection with the
      Merger. Assuming that, prior to the consummation of the Merger, no additional
      shares of our common stock are issued and none of our stockholders exercise
      their conversion rights and that none of our or Dynogen’s outstanding options or
      warrants are exercised, upon such consummation, our stockholders immediately
      prior to the Merger are expected to own approximately 44.4% of the then
      outstanding shares of our common stock (or approximately 43.7% on a
      fully-diluted basis giving effect to all outstanding options, warrants and
      other
      rights, including the milestone payments); however, if 29.99% of our
      stockholders exercise their conversion rights, we expect our stockholders to
      hold approximately 37.8% of the shares of our common stock outstanding
      immediately following the closing of the Merger (or approximately 40.5% on
      a
      fully-diluted basis giving effect to all outstanding options, warrants and
      other
      rights, including the milestone payments).




***A
      substantial number of our shares will become eligible for future resale in
      the
      public market after the Merger which could result in dilution and have an
      adverse effect on the market price of those shares.***




If
      the
      Merger is completed, warrants to purchase 8,625,000 shares of common stock
      issued in connection with our Public Offering and warrants to purchase 1,800,000
      shares of our common stock issued in a Private Placement to certain of our
      founding stockholders immediately prior to our Public Offering will become
      exercisable on the date the Merger is completed. Additionally, if the Merger
      is
      completed, it is currently estimated that approximately 20.9 million shares
      of
      our common stock will be issued, or reserved for future issuance, to the holders
      of Dynogen capital stock, option, warrants or other securities at the closing
      of
      the Merger.




30




Substantially
      all of these shares will be eligible for resale upon issuance, subject to
      limitations under applicable securities laws. Additionally, if the Merger is
      completed, we expect to register for resale the shares issued to those former
      stockholders of Dynogen who will become our affiliates and would not otherwise
      be able to sell without an exemption from registration. In addition, our Initial
      Stockholders have the right to require us to file a registration statement
      covering the resale of certain shares of our common stock, warrants and shares
      of our common stock underlying such warrants held by such persons. Consequently,
      at various times after completion of the Merger, a substantial number of
      additional shares of our common stock will be eligible for resale in the public
      market. Sales of substantial numbers of such shares in the public market could
      adversely affect the market price of such shares and of the warrants.
      Notwithstanding the foregoing, the shares of our common stock held by our
      Initial Stockholders are subject to escrow agreements and will not be released
      from escrow until the earliest of (a) with respect to certain shares of our
      common stock, the first year anniversary of our initial business combination,
      and with respect to certain warrants to purchase our common stock, the six
      month
      anniversary of our initial business combination, (b) our liquidation (in which
      case they will have no value) and (c) the consummation of a liquidation, merger,
      stock exchange or other similar transaction which results in all of our
      stockholders having the right to exchange their shares of common stock for
      cash,
      securities or other property subsequent our initial business combination, if
      any, with a target business. Additionally, because we are a blank check company,
      so long as they continue to be affiliates, our Initial Stockholders will not
      be
      able to sell our securities pursuant to Rule 144.




***Our
      directors and executive officers have interests in the Merger that are different
      from yours because if the Merger is not approved then the shares held by them
      may become worthless.***




In
      considering the recommendation of our board of directors to vote for the
      proposal to approve the Merger Agreement, you should be aware that a number
      of
      our officers and directors have interests in the Merger that are different
      from,
      or in addition to, your interests as a stockholder. These interests include,
      among other things:




·
            If
                the Merger is not approved and we are therefore required to dissolve
                and
                liquidate, the shares of common stock purchased prior to our Public
                Offering and held by our officers and directors (or their affiliates)
                will
                be worthless because our directors and officers are not entitled
                to
                receive in respect of such shares any of the net proceeds of our
                Public
                Offering that may be distributed from our Trust Account upon our
                liquidation. If the Merger is not approved and we are therefore required
                to dissolve and liquidate, such officers and directors will, however,
                be
                entitled to receive their share of the net proceeds of our Public
                Offering
                that may be distributed from our Trust Account with respect to any
                shares
                of our common stock purchased in or following our Public Offering.
                In
                addition, the warrants held by such persons for which they paid an
                aggregate of $1,800,000, which will be exercisable at the completion
                of
                the Merger for 1,800,000 shares of our common stock, will expire
                without
                value in the event that we are required to
                liquidate.




·
            If
                the Merger is not approved and we are therefore required to dissolve
                and
                liquidate, our Initial Stockholders have each agreed on a joint and
                several basis to be personally liable to ensure that the proceeds
                from our
                Public Offering held in the trust account are not reduced by the
                claims of
                (a) vendors or other entities for services rendered or products sold
                to us
                or (b) any prospective target business, in each case only to the
                extent
                the payment of such debts and obligations actually reduces the amount
                of
                funds in the Trust Account (or, in the event that such claim arises
                after
                the distribution of the Trust Account, to the extent necessary to
                ensure
                that our Public Stockholders are not liable for any amount of such
                loss,
                liability, claim, damage or expense) and only with respect to vendors,
                prospective target business and other entities we engage who do not
                waive
                their right or claim in or to the monies held in the Trust Account.
                If the
                Merger is completed, these indemnification obligations will
                terminate.




31




·
            Certain
                of our existing directors anticipate remaining on the board of directors
                after the consummation of the Merger, which may result in the surviving
                corporation paying a fee to them for their services.




***The
      amount of stock held by executive officers, directors and other affiliates
      following the Merger may limit your ability to influence the outcome of director
      elections and other matters requiring stockholder approval.***




Upon
      consummation of the Merger with Dynogen, our officers, directors and affiliates
      will beneficially own approximately 10% of our common stock. These stockholders
      can have a substantial influence on all matters requiring approval by
      stockholders, including the election of directors and the approval of mergers
      or
      other business combination transactions. This concentration of ownership could
      have the effect of delaying or preventing a change in control or discouraging
      a
      potential acquirer from attempting to obtain control of the combined company,
      which in turn could have a material adverse effect on the market price of our
      common stock or prevent stockholders from realizing a premium over the market
      price for their shares of common stock.




***The
      lack of diversification in our business following the Merger affects our ability
      to mitigate the risks that we may face or to offset possible losses that we
      may
      incur as a result of competing in the biotechnology industry.***




The
      prospects for our success will be entirely dependent upon the future performance
      of Dynogen’s business. We may not have the resources to diversify our operations
      or benefit from the possible spreading of risks or offsetting of losses. By
      consummating a business combination with only a single entity, our lack of
      diversification may subject us to numerous economic, competitive and regulatory
      developments, any or all of which may have a substantial adverse impact upon
      the
      biotechnology industry and result in our dependency upon the development or
      market acceptance of Dynogen’s products.




***The
      combined company may form joint ventures that could harm its operating results,
      dilute your ownership of the combined company, increase its debt or cause it
      to
      incur significant expense.***




As
      part
      of the combined company’s business strategy, it may pursue strategic alliances
      that leverage its core technology and industry experience to expand its product
      offerings or distribution. To effect these strategic alliances, we may choose
      to
      issue shares of our common stock or securities convertible into our common
      stock, which would dilute your interest in us. Alternatively, it may be
      necessary for us to raise additional funds for working capital through public
      or
      private financings. Additional funds may not be available on terms that are
      favorable to us, or at all, and to the extent such funds are available, such
      financing may include restrictive covenants that could hinder our ability to
      obtain additional financing, if necessary.




***Following
      the Merger with Dynogen, we will incur significant increased costs, and our
      financial controls and procedures may not be sufficient to ensure timely and
      reliable reporting of financial information, which, as a public company, could
      materially harm our stock price and listing on the American Stock Exchange.***




32




Following
      the Merger, we will incur significant legal, accounting and other expenses.
      Dynogen has not incurred these expenses as a private company, and, because
      of
      our lack of an operating business, to date, we have incurred these expenses
      only
      to a limited extent. In addition, the Sarbanes-Oxley Act of 2002, and rules
      of
      the SEC, and the American Stock Exchange have imposed various requirements
      on
      public companies including requiring establishment and maintenance of effective
      disclosure and financial controls. Following the Merger, our management and
      other personnel will need to devote a substantial amount of time to these
      compliance initiatives. Moreover, these rules and regulations will increase
      our
      legal and financial compliance costs and will make some activities more
      time-consuming and costly. For example, these rules and regulations may make
      it
      more difficult and more expensive for us to obtain and maintain director and
      officer liability insurance, and we may be required to incur substantial costs
      to maintain the same or similar coverage.




The
      Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain
      effective internal control over financial reporting and disclosure controls
      and
      procedures. In particular, we must perform system and process evaluation and
      testing of our internal control over financial reporting to allow management
      and
      our independent registered public accounting firm to report on the effectiveness
      of our internal control over financial reporting, as required by Section 404
      of
      the Sarbanes-Oxley Act, beginning with the annual report on Form 10-K for the
      fiscal year ending December 31, 2008. Our compliance with Section 404 of the
      Sarbanes-Oxley Act will require that we incur substantial accounting expense
      and
      expend significant management efforts.




The
      effectiveness of our controls and procedures may in the future be limited by
      a
      variety of factors, including:




·
            faulty
                human judgment and simple errors, omissions or
                mistakes;




·
            fraudulent
                action of an individual or collusion of two or more
                people;




·
            inappropriate
                management override of procedures;
                and




·
            the
                possibility that any enhancements to controls and procedures may
                still not
                be adequate to assure timely and accurate financial
                information.




If
          we are not
          able to comply with the requirements of Section 404 in a timely manner,
          or if we
          or our independent registered public accounting firm identify deficiencies
          in
          our internal control over financial reporting that are deemed to be material
          weaknesses, we may be subject to delisting from any exchange on which our
          securities are then traded, SEC investigation and civil or criminal sanctions.




Our
      ability to successfully implement our business plan and comply with Section
      404
      requires us to be able to prepare timely and accurate financial statements.
      We
      expect that we will need to continue to improve existing, and implement new
      operational and financial and accounting systems, procedures and controls to
      manage our business effectively.




Any
      delay
      in the implementation of, or disruption in the transition to, new or enhanced
      systems, procedures or controls may cause our operations to suffer, and we
      may
      be unable to conclude that our internal control over financial reporting is
      effective and to obtain an unqualified report on internal controls from our
      auditors as required under Section 404 of the Sarbanes-Oxley Act. If we are
      unable to complete the required Section 404 assessment as to the adequacy of
      our
      internal control over financial reporting, if we fail to maintain or implement
      adequate controls, or if our independent registered public accounting firm
      is
      unable to provide us with an unqualified report as to the effectiveness of
      our
      internal control over financial reporting as of the date of our first Form
      10-K
      for which compliance is required, our ability to obtain additional financing
      could be impaired. In addition, investors could lose confidence in the
      reliability of our internal control over financial reporting and in the accuracy
      of our periodic reports filed under the Securities Exchange Act of 1934, as
      amended, or the Exchange Act. A lack of investor confidence in the reliability
      and accuracy of our public reporting could cause our stock price to decline.




33




***Following
      the Merger, our management will have broad discretion to use available cash
      and
      the investment of these resources may not yield a favorable return. We may
      invest the available cash in ways you disagree with.***




Our
      management will have broad discretion as to how to spend and invest the cash
      that will be available to us upon completion of the Merger and distribution
      from
      the trust fund, and we may spend or invest these capital resources in a way
      with
      which you may disagree. Because we are not required to allocate cash to any
      specific investment or transaction, you cannot determine at this time the value
      or propriety of our application of these resources. Accordingly, you will need
      to rely on our post-Merger management’s judgment with respect to the use of this
      cash. Moreover, you will not have the opportunity to evaluate the economic,
      financial or other information on which we base our decision on how to use
      this
      cash. Pending use, we plan to invest available cash in short-term,
      investment-grade, interest bearing securities. These investments may not yield
      a
      favorable return to stockholders.




***Neither
      we nor Dynogen has ever declared or paid dividends on its capital stock, and
      we
      do not anticipate paying dividends in the foreseeable future. As a result,
      you
      must rely on stock appreciation for any return on your investment.***




Following
      the Merger, Dynogen’s business will require significant funding, and we
      currently plan to invest all available funds and future earnings in the
      development and growth of this business. Therefore, we do not anticipate paying
      any cash dividends on our common stock in the foreseeable future. Any payment
      of
      cash dividends will also depend on our financial condition, results of
      operations, capital requirements and other factors and will be at the discretion
      of our board of directors. As a result, capital appreciation, if any, of the
      common stock will be your sole source of potential gain for the foreseeable
      future. Furthermore, we may in the future become subject to contractual
      restrictions on, or prohibitions against, the payment of dividends, including
      pursuant to the terms of debt agreements.




***Our
      ability to utilize Dynogen’s historical, federal and state net operating loss
      carryforwards may currently be limited or may become limited.***




As
      of
      December 31, 2007, Dynogen had net operating loss carryforwards for federal
      and
      state income tax purposes of $63 million and $48 million, respectively. If
      not
      utilized, these carryforwards will expire at various dates starting in 2008
      through 2027. Generally, utilization of a company’s net operating loss
      carryforwards may be subject to substantial annual limitations due to rules
      contained in the Internal Revenue Code (and similar state provisions) that
      are
      applicable if the company experiences an “ownership change.” Generally, a change
      of more than 50% in the ownership of a company’s stock, by value, over a
      three-year period constitutes an ownership change for United States federal
      income tax purposes. Additionally, even if there were no ownership changes
      previously, it is possible that the Merger, when considered together with past
      transactions and potential future transactions, could trigger an ownership
      change for this purpose. As a result, our ability to use Dynogen’s net operating
      loss carryforwards may be or become subject to substantial limitations, which
      could potentially result in increased future tax liability and in the expiration
      of Dynogen’s net operating loss carryforwards before they can be used.




**Item
      1B.**  **UNRESOLVED
      STAFF COMMENTS**




Not
      applicable




34




**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. During a portion of 2007, we also occupied office space at 724 Fifth
      Avenue, New York, New York 10019, provided by Craig Drill Capital, an affiliate
      of Robert J. Easton, one of our directors. During 2007, we made payments to
      Apex
      Bioventures, LLC and Craig Drill Capital in aggregate amounts of $6,000 and
      $3,500 respectively, for rent and administrative services. However, such
      payments have been discontinued and additional payments are not anticipated
      prior to the consummation of a business combination.




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, 2007.




35




**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 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.




The
      closing high and low sales prices of our units, common stock, and warrants
      as
      reported by the American Stock Exchange, for the quarters indicated are as
      follows:


Common
                  Stock
              
              Warrants
              
              UnitsHigh
              
              Low
              
              High
              
              Low
              
              High
              
              Low**2007:**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




As
      of
      March 6, 2008, there was one holder of record for our units, and there were
      10 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 the completion of a business combination. The payment of
      dividends in the future will be contingent upon our revenues and earnings,
      if
      any, capital requirements and general financial condition subsequent to
      completion of a business combination. The payment of any dividends subsequent
      to
      a business combination will be within the discretion of our then board of
      directors. It is the present intention of our board of directors to retain
      all
      earnings, if any, for use in our business operations and, accordingly, our
      board
      does not anticipate declaring any dividends in the foreseeable
      future.




**Recent
      Sales of Unregistered Securities**




Since
      inception in June 2006, we sold the following shares of common stock without
      registration under the Securities Act:




**STOCKHOLDERS**
              
              **NUMBER
                  OF SHARES**Invivos
                  Partners Ltd.
              
              
              268,858K.
                  Michael Forrest
              
              
              472,803Treasure
                  Road Partners Ltd.
              
              
              359,790Robert
                  J. Easton
              
              
              397,310John
                  J. Chandler
              
              
              126,313Nancy
                  T. Chang
              
              
              183,951Anthony
                  J. Sinskey
              
              
              97,474Robert
                  L. Van Nostrand
              
              
              152,277Rix
                  Clinical Laboratories Ltd.
              
              
              97,4742,156,250




36




Each
      stockholder named is one of our directors or an entity controlled by one of
      our
      directors. These are the stockholders which we refer to as our Initial
      Stockholders elsewhere herein.




Such
      shares were issued on June 27, 2006 in connection with our organization pursuant
      to the exemption from registration contained in Section 4(2) of the Securities
      Act as they were sold to sophisticated, wealthy individuals (or entities
      beneficially owned and controlled by them). The shares issued to the individuals
      and entities above were sold for an aggregate offering price of $25,000 at
      an
      average purchase price of approximately $0.01159 per share. No underwriting
      discounts or commissions were paid with respect to such sales.




The
      shares listed above give effect to the transactions described
      below.




In
      October 2006, Robert J. Easton, who previously held the largest membership
      interest in Easton Associates, LLC, terminated his association with Easton
      Associates, LLC. Subsequently, in April 2007, the Company purchased from Easton
      Associates, LLC all of the shares of our common stock held by Easton Associates,
      LLC for $4,096.35 in cash. Subsequently, Mr. Easton purchased from the Company
      the same number of shares for $4,096.35.




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, our then existing 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
      April
      2007, the Company effected a 1 for 1.086956522 reverse stock split of its
      outstanding common stock (effectively increasing the price paid for each share
      from $0.01067 to $0.01159).




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.




Prior
      to
      the closing of our Public Offering, in the Private Placement, we sold warrants
      to purchase up to 1,800,000 shares of common stock, at a purchase price of
      $1.00
      per warrant. These warrants were purchased by our Initial Stockholders on a
      pro
      rata basis based on the relative number of shares of our common stock held
      by
      each of them prior to our Public Offering. These warrants 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 our Initial Stockholders are transferable or salable
      until six months after the consummation of a business combination




**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.




37




Our
      net
      proceeds from our public offering are as set forth in the following
      table:




**USE
      OF PROCEEDS**


*Gross
                  proceeds*Offering
                  gross proceeds
              
              $
              69,000,000Gross
                  proceeds from private placement of founder warrants
              
              
              1,800,000Total
                  gross proceeds
              
              $
              70,800,000*Offering
                  and private placement expenses (1)*Underwriting
                  discounts and commissions (7% of offering gross proceeds)
                  (2)
              
              $
              4,830,000Legal
                  fees and expenses
              
              
              350,000Miscellaneous
                  expenses
              
              
              91,400Printing
                  and engraving expenses
              
              
              65,000Accounting
                  fees and expenses
              
              
              50,000SEC
                  registration fees
              
              
              17,100NASD
                  (now FINRA) registration fees
              
              
              16,500AMEX
                  Listing Fees
              
              
              70,000Total
                  offering expenses
              
              $
              5,490,000*Proceeds
                  after non-deferred offering and private placement
                  expenses*
              
              $
              65,310,000*Deferred
                  underwriting discounts and commissions held in trust*
              
              
              2,070,000Adjusted
                  proceeds after offering expenses
              
              
              67,380,000Total
                  proceeds not held in trust
              
              
              50,000Total
                  net proceeds held in trust
              
              $
              67,330,000*Use
                  of new proceeds not held in trust and $1,600,000 of the interest
                  income
                  earned on the trust account (net of taxes payable) that will be
                  released
                  to us*Legal,
                      accounting and other expenses attendant to the due diligence
                      investigation, structuring and negotiation of a business combination
                      and
                      the preparation and the preparation and filing of the related
                      proxy
                      statement
              
              $
              415,500Opinion
                  of investment banking firm
              
              
              280,000Payment
                  of administrative services and support
              
              
              9,500Due
                  diligence of prospective target business
              
              
              350,000Miscellaneous
                  fees
              
              
              145,000Working
                  capital to cover miscellaneous expenses including D & O insurance and
                  other insurance and possibly dissolution expense (3)
              
              
              450,000Total
              
              $
              1,650,000




(1)
            A
                portion of the public offering and private placement expenses were
                paid
                from the funds we received from our Initial Stockholders, as described
                below. Those funds were repaid upon the consummation, and out of
                the
                proceeds, of the Public Offering.




(2)
            The
                amount of deferred underwriting discounts and the amount held in
                trust
                includes $2,070,000 that will be paid to the underwriters only upon
                consummation of the initial business combination and will not be
                available
                for use to acquire an operating
                business.




(3)
            The
                miscellaneous fees and expenses may include, without limitation,
                potential
                deposits, down-payments, exclusivity fees, finders’ fees, or similar fees
                or compensation, reserves, costs and expenses associated with our
                dissolution and liquidation.




38




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 will not be released from
      the
      Trust Account until the earlier of the completion of a business combination
      or
      our dissolution. All amounts held in the trust account that are not converted
      to
      cash or released to us as interest income, net of income taxes, will be released
      on closing of our initial business combination with one or more target
      businesses which have a fair market value equal to at least 80% of our net
      assets (excluding deferred underwriting discounts and commissions of $2,070,000)
      at the time of such business combination, subject to a majority of our Public
      Stockholders voting in favor of the business combination and less than 30%
      of
      the Public Stockholders voting against the business combination and exercising
      their conversion rights. Following release from the Trust Account of $1,600,000
      of the interest income, net of taxes payable on such interest, that we may
      use
      for working capital requirements and after payment of the conversion price
      to
      any Public Stockholders who exercise their conversion rights, the underwriters
      will receive their deferred underwriting fee discount equal to 3% of the gross
      proceeds of the Public Offering. The remaining funds will be released to us
      and
      can be used to pay all or a portion of the purchase price of the business or
      businesses with which our initial combination occurs. If the business
      combination is paid for using stock or debt securities (as contemplated by
      the
      proposed Dynogen Merger), we may apply the cash released to us from the Trust
      Account to general corporate purposes, including for maintenance or expansion
      of
      operations of the acquired business, the payment of principal or interest due
      on
      indebtedness incurred in consummating our initial business combination or for
      working capital to finance the operations of the target business, which may
      include subsequent acquisitions.




Of
      the
      net proceeds of the Public Offering and Private Placement, we have allocated
      approximately $300,000 for premiums for director and officer liability
      insurance, with a balance of $150,000 allocated for other miscellaneous expenses
      of structuring and negotiating business combinations, and, if necessary, to
      cover the costs and expenses associated with our dissolution and liquidation
      (which we estimate will be in the range of $50,000 to $75,000). We have
      allocated $350,000 for the expenses associated with identifying and performing
      initial due diligence of prospective acquisition targets. We have further
      allocated approximately $415,500 for legal, accounting and other expenses
      attendant to the due diligence investigations, structuring and negotiation
      of a
      business combination and the preparation and filing of the related proxy
      statement, and approximately $280,000 for an opinion of an independent
      investment banking firm relating to a potential business combination. Due
      diligence of prospective target businesses has been (and to the extent
      necessary, will be) performed by some or all of our officers and directors
      and
      third party consultants. None of our officers, directors or Initial Stockholders
      will receive any compensation for their due diligence efforts, other than
      reimbursement of any out-of-pocket expenses they may incur on our behalf while
      performing due diligence of prospective target businesses. 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, such out-of-pocket expenses would not be reimbursed by us
      unless we consummate a business combination. In addition, although we have
      not
      done so and have no present intention to do so, if the contemplated Merger
      with
      Dynogen is not consummated, it is possible that we will in the future find
      it
      necessary or desirable to use a portion of these funds to make a down payment
      or
      deposit or fund a lock-up or “no-shop” provision, with respect to a potential
      business combination. We have not reserved any specific amounts for such
      payments or fees, which may have the effect of reducing the available proceeds
      not deposited in the Trust Account for payment of our ongoing expenses and
      reimbursement of out-of-pocket expenses incurred on our behalf. If we use a
      significant portion of our funds for such a purpose and we are required to
      forfeit such funds (whether as a result of our breach of the agreement relating
      to the original payment or otherwise), we could, if such payment was large
      enough and we had already used some or all of the funds allocated to due
      diligence and related expenses in connection with the aborted transaction,
      be
      left with insufficient funds to continue searching for, or to conduct due
      diligence with respect to, other potential target businesses. In that event,
      we
      may be required to liquidate before the completion of a business
      combination.




39




Treasure
      Road Partners, Ltd., a company controlled by Gary E. Frashier and his wife,
      Giva
      H. Frashier, Easton Associates, LLC, the largest equity holder of which was
      Robert J. Easton, and K. Michael Forrest each loaned to us $75,000 for the
      payment of offering expenses. In connection with the termination of Mr. Easton’s
      association with Easton Associates, in April 2007, we repaid in full the $75,000
      loaned to us by Easton Associates. Subsequently, Mr. Easton loaned us $75,000.
      These non-interest bearing loans were repaid out of the proceeds of the Public
      Offering not held in trust.




In
      June
      2007, Darrell J. Elliott, K. Michael Forrest and Gary E. Frashier advanced
      to us
      $16,666, $16,666 and $16,668, respectively, to partially fund our listing fee
      for the American Stock Exchange. These non-interest bearing advances were repaid
      out of the proceeds of the Public Offering not held in trust.




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. We believe 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, will be sufficient to allow us to operate for at least the next
      two months. However, we may need to raise additional funds through a private
      offering of debt or equity securities if such funds are not adequate to
      consummate the Dynogen Merger (or an alternative business combination). In
      the
      Merger Agreement, we have provided for having to raise up to $750,000 to
      consummate the Dynogen Merger.




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
      and performing due diligence on suitable business combinations. Since the role
      of present management after a business combination is uncertain, we have no
      ability to determine what remuneration, if any, will be paid to those persons
      after a business combination. To the extent that our capital stock is used
      in
      whole or in part as consideration to effect a business combination (as
      contemplated by the proposed Merger with Dynogen), the proceeds held in the
      Trust Account as well as any other net proceeds not expended will be used to
      finance the operations of the target business.




A
      Public
      Stockholder will be entitled to receive funds from the trust account only in
      the
      event of our dissolution upon our failure to complete a business combination
      by
      June 13, 2009 or if that Public Stockholder were to seek to convert such shares
      to cash by exercising conversion rights in connection with a business
      combination which he, she or it voted against and which we actually consummate.
      In no other circumstances will a Public Stockholder have any right or interest
      of any kind to or in the Trust Account.




40




In
      the
      event of our dissolution, as described above, 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**




The
      following tables should be read in conjunction with our financial statements
      and
      the notes thereto appearing elsewhere in this Annual Report on Form 10-K. The
      selected income statement and balance sheet data has been derived from our
      audited financial statements, which are included elsewhere in this Annual
      Report. The selected quarterly data is unaudited.




**For
                  the Year Ended December 31, 2007**
              
              **Period
                  from Inception (June 1, 2006) to December 31,
                  2006**
              
              **Period
                  from Inception (June 1, 2006) to December 31,
                  2007****Income
                  Statement Data**Formation
                  and operating costs
              
              $
              (581,816
              )
              $
              (53,388
              )
              $
              (635,204
              )Dividend
                  and interest income
              
              
              1,785,716
              
              
              1,064
              
              
              1,786,780Income
                  (loss) before provision for income taxes
              
              
              1,203,900
              
              
              (52,324
              )
              
              1,151,576Provision
                  for income taxes
              
              
              (506,975
              )
              
              -
              
              
              (506,975
              )Net
                  income (loss)
              
              $
              696,925
              
              $
              (52,324
              )
              $
              644,601Net
                  income (loss) per share - basic and diluted
              
              $
              0.10
              
              $
              (0.02
              )Weighted
                  average number of common shares outstanding - basic and
                  diluted
              
              
              6,929,538
              
              
              2,156,250




**December
                  31, 2007**
              
              **December
                  31, 2006****Balance
                  sheet data**Cash
                  and cash equivalents
              
              $
              1,060,427
              
              $
              82,739Investments
                  held in trust
              
              
              67,584,688
              
              
              -Other
                  assets
              
              
              264,350
              
              
              315,914Total
                  assets
              
              $
              68,909,465
              
              $
              398,653Total
                  liabilities
              
              $
              2,903,064
              
              $
              425,977Common
                  stock, subject to possible redemption
              
              
              20,208,367
              
              
              -Total
                  stockholders’ equity (deficiency)
              
              
              45,798,034
              
              
              (27,324
              )Total
                  liabilities and stockholders’ equity
              
              $
              68,909,465
              
              $
              398,653




41




**Selected
      Quarterly Data (unaudited)**




Financial
      information for each quarter for the period from June 1, 2006 (inception) to
      December 31, 2007 is as follows:




March
                  31,
              
              June
                  30,
              
              September
                  30,
              
              December
                  31,2006
              
              2006
              
              2006
              
              2006Total
                  revenue
              
              $
              -
              
              $
              -
              
              $
              683
              
              $
              381Income
                  (loss) from operations
              
              
              -
              
              
              (7,722
              )
              
              619
              
              
              (45,221
              )Net
                  income (loss)
              
              
              -
              
              
              (7,722
              )
              
              619
              
              
              (45,221
              )Net
                  income (loss) per share - basic and diluted
              
              
              -
              
              
              -
              
              
              -
              
              
              (0.02
              )




March
                  31,
              
              June
                  30,
              
              September
                  30,
              
              December
                  31,2007
              
              2007
              
              2007
              
              2007Total
                  revenue
              
              $
              509
              
              $
              116,026
              
              $
              875,429
              
              $
              793,752Income
                  (loss) from operations
              
              
              (5,056
              )
              
              37,656
              
              
              704,509
              
              
              466,791Net
                  income (loss)
              
              
              (5,056
              )
              
              37,656
              
              
              411,389
              
              
              252,936Net
                  income (loss) per share - basic and diluted
              
              
              -
              
              
              0.01
              
              
              0.04
              
              
              0.02






**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. We currently
      expect to consummate the Merger with Dynogen for approximately 13,500,000 shares
      of our common stock (plus, up to approximately 6,327,372 additional shares
      of
      our common stock upon the satisfaction of certain milestones and the up to
      approximately 1,200,000 additional shares of our common stock upon the exercise
      of certain options and warrants issued or assumed in connection with the
      Merger).




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
      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.




42




For
      the
      period from inception (June 1, 2006) to December 31, 2006, we incurred a net
      loss of $52,324, consisting of formation and operating costs of $53,388 offset
      by dividend and interest income of $1,064.




The
      net
      income of $644,601 for the period from June 1, 2006 (date of inception) to
      December 31, 2007 consisted of formation and operating costs of $635,204, offset
      by dividend and interest income of $1,786,780 and a provision for income taxes
      of $506,975.




*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
      will use 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. We
      believe the funds available to us outside of the Trust Account ($1,060,427
      as of
      December 31, 2007), together with the balance of interest income, net of income
      taxes on such interest, to be released to us for working capital requirements
      will be sufficient to allow us to operate for at least the next two months.
      However, we may need to raise additional funds through a private offering of
      debt or equity securities if such funds are not adequate to consummate the
      Dynogen Merger (or an alternative business combination). In the Merger
      Agreement, we have provided for having to raise up to $750,000 to consummate
      the
      Dynogen Merger. If the Dynogen Merger is not consummated and we seek another
      acquisition target, we may use all or substantially all of the funds held in
      the
      Trust Account to consummate such business combination. To the extent that our
      capital stock is used in whole or in part as consideration to effect a business
      combination (as currently contemplated by the proposed Merger with Dynogen),
      the
      proceeds held in the Trust Account as well as any other net proceeds not
      expended will be used to finance the operations of the target
      business.




*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.**




Market
      risk is the sensitivity of income to changes in interest rates, foreign
      exchanges, commodity prices, equity prices, and other market-driven rates or
      prices. We are not presently engaged in, and if the proposed Dynogen Merger
      is
      not consummated or another suitable business target is not identified by us
      prior to the prescribed liquidation of the trust account we may not engage
      in,
      any substantive commercial business. Accordingly, the risks associated with
      foreign exchange rates, commodity prices, and equity prices are not
      significant.




43




**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:Reports
                  of Independent Registered Public Accounting Firms.
              
              
              F-1Balance
                  Sheets as of December 31, 2007 and 2006
              
              
              F-3Statements
                      of Operations for the Year Ended December 31, 2007, the period
                      fromJune 1, 2006 (inception) to December 31, 2006 and the
                      period from
                      June 1, 2006 (inception) to December 31,
                      2007
              
              
              F-4Statements
                    of Stockholders’ Equity (Deficiency) for the period from June 1, 2006(inception) to December 31, 2007
              
              
              F-5Statements
                    of Cash Flows for the Year Ended December 31, 2007, the period
                    from June
                    1, 2006 (inception) to December 31, 2006 and the period from
                    June 1, 2006(inception) to December 31, 2007
              
              
              F-6Notes
                  to Financial Statements
              
              
              F-7






**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, 2007 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.




There
      has
      not been any change in our internal control over financial reporting in
      connection with the evaluation required by Rule 13a-15(d) under the Exchange
      Act
      that occurred during the three months ended December 31, 2007 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.




**Item
      9B.** **OTHER
      INFORMATION**




Not
      applicable.




44




**PART
      III**




**Item
      10** **.** **DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**




Pursuant
      to General Rule G(3), information on our directors and executive officers will
      be filed in an amendment to this Annual Report on Form 10-K or incorporated
      by
      reference from our definitive proxy statement to be filed within 120 days of
      the
      end of our fiscal year.




**Item
      11** **.** **EXECUTIVE
      COMPENSATION**


The
        information required by this item is incorporated by reference from the
        documents referenced in Item 10 above.




**Item
        12** **.** **SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
        MATTERS**


The
        information required by this item is incorporated by reference from the
        documents referenced in Item 10 above.




**Item
        13** **.** **CERTAIN
        RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
        INDEPENDENCE**
  The
          information required by this item is incorporated by reference from the
          documents referenced in Item 10 above.




**Item
      14** **.** **PRINCIPAL
      ACCOUNTING FEES AND SERVICES**




The
        information required by this item is incorporated by reference from the
        documents referenced in Item 10 above.




45




**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
              
              Description2.1††
              
              
              Agreement
                  and Plan of Merger, by and among, Apex, Dynogen, Acquisition Sub,
                  and the
                  Holder Representative identified therein3.1†
              
              
              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.
  46
  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
                  Registrant14.1@
              
              
              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.




*
              
              
              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 8-K, dated February 6, 2008.@
              
              
              Previously
                  filed and incorporated herein by reference to the registrant’s Current
                  Report on Form 8-K, dated June 19, 2007




47




**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 CORPORATION**Date:
              March
              11, 2008
            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
                      11, 2008Darrell
                  J. Elliott
              (principal
                  executive
                  officer) and DirectorBy: 
                  /s/ Gary
                  E. Frashier
              Chief
                  Financial Officer
              March
                        11, 2008Gary
                  E. Frashier
              (principal
                  financial and accounting officer)By:  
                  /s/ K.
                  Michael Forrest
              President,
                  Chief Operating Officer,
              March
                        11, 2008K.
                  Michael Forrest
              DirectorBy:  
                  /s/ Robert
                  J. Easton
              Director
              March
                        11, 2008Robert
                  J. EastonBy:  
                  /s/ John
                  J. Chandler
              Director
              March
                        11, 2008John
                  J. ChandlerBy:  
                  /s/ Nancy
                  T. Chang
              Director
              March
                        11, 2008Nancy
                  T. ChangBy:  
                  /s/ Anthony
                  J. Sinskey
              Director
              March
                        11, 2008Anthony
                  J. SinskeyBy:  
                  /s/ Robert
                  L. Van
                  Nostrand
              Director
              March
                        11, 2008Robert
                  L. Van NostrandBy:  
                  /s/ Donald
                  B. Rix
              Director
              March
                        11, 2008Donald
                  B. Rix




48




REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To
      the
      Board of Directors and Stockholders


Apex
      Bioventures Acquisition Corporation




We
      have
      audited the balance sheet of Apex Bioventures Acquisition Corporation (a
      development stage company) as of December 31, 2007, and the related statements
      of operations, stockholders’ equity (deficiency) and cash flows for the year
      then ended and the amounts included in the cumulative columns in the statements
      of operations and cash flows for the year then ended. 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
      audit.




We
      conducted our audit 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 audit provides 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, 2007 and the results of its operations and its
      cash flows for the year then ended and the amounts included in the cumulative
      columns in the statements of operations and cash flows for the year then ended,
      in conformity with U.S. generally accepted accounting principles.




/s/
        MCGLADREY & PULLEN, LLP


MCGLADREY
      & PULLEN, LLP


New
      York,
      NY





March
        7,
        2008




F-1




REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To
      the
      Board of Directors and Stockholders


Apex
      Bioventures Acquisition Corporation





We
      have
      audited the accompanying balance sheet of Apex Bioventures Acquisition
      Corporation (a corporation in the development stage) (the “Company”) as of
      December 31, 2006 and the related statements of operations, stockholders’ equity
      (deficiency) and cash flows for the period from June 1, 2006 (date of inception)
      to December 31, 2006, and the period included in the cumulative columns from
      June 1, 2006 (date of inception) to December 31, 2006. 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 audit.




We
      conducted our audit 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 audit provides 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, 2006, and the results of its operations and
      its
      cash flows for the period from June 1, 2006 (date of inception) to December
      31,
      2006, and the period included in the cumulative columns from June 1, 2006 (date
      of inception) to December 31, 2006 in conformity with United States generally
      accepted accounting principles.




/s/
        GOLDSTEIN GOLUB KESSLER LLP


GOLDSTEIN
      GOLUB KESSLER LLP


New
      York,
      New York





June
      19,
      2007




F-2




Apex
      Bioventures Acquisition Corporation


(a
      development stage company)


Balance
      Sheets




December
                  31,2007
              
              2006AssetsCurrent
                  assetsCash
                  and cash equivalents
              
              $
              1,060,427
              
              $
              82,739Cash
                  held in trust
              
              
              65,514,688
              
              
              -Cash
                  held in trust from underwriter
              
              
              2,070,000
              
              
              -Prepaid
                  expenses
              
              
              66,244
              
              
              -Total
                  current assets
              
              
              68,711,359
              
              
              82,739Deferred
                  tax asset, net
              
              
              198,106
              
              
              -Deferred
                  offering costs
              
              
              -
              
              
              315,914Total
                  assets
              
              $
              68,909,465
              
              $
              398,653Liabilities
                  and Stockholders’ Equity (Deficiency)Current
                  liabilitiesAccounts
                  payable and accrued expenses
              
              $
              126,007
              
              
              196,807Accounts
                  payable, stockholders
              
              
              2,776
              
              
              4,170Income
                  taxes payable
              
              
              704,281
              
              
              -Notes
                  payable, stockholders
              
              
              -
              
              
              225,000Due
                  to underwriter
              
              
              2,070,000
              
              
              -Total
                  current liabilities
              
              
              2,903,064
              
              
              425,977Common
                  stock subject to conversion (2,587,499 shares at conversion
                  value)
              
              
              20,208,367CommitmentsStockholders’
                  equity (deficiency)Preferred
                  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)
                and
                  2,156,250 issued and outstanding, respectively
              
              
              1,078
              
              
              216Additional
                  paid-in capital
              
              
              45,152,355
              
              
              24,784Income
                  (Deficit) accumulated during the development stage
              
              
              644,601
              
              
              (52,324
              )Total
                  stockholders’ equity (deficiency)
              
              
              45,798,034
              
              
              (27,324
              )Total
                  liabilities and stockholders’ equity (deficiency)
              
              $
              68,909,465
              
              $
              398,653




**See
      notes to financial statements.**




F-3




Apex
      Bioventures Acquisition Corporation


(a
      development stage company)


Statements
      of Operations


Year
                  Ended
                December
                  31, 2007
              
              Period
                  from
                June
                  1, 2006 (Inception) to December 31, 2006
              
              Period
                  from
                June
                  1, 2006 (Inception) to
                December
                  31, 2007Formation
                  and operating costs
              
              $
              (581,816
              )
              $
              (53,388
              )
              $
              (635,204
              )Dividend
                  and interest income
              
              
              1,785,716
              
              
              1,064
              
              
              1,786,780Income
                  (loss) before provision for income taxes
              
              
              1,203,900
              
              
              (52,324
              )
              
              1,151,576Provision
                  for income taxes
              
              
              (506,975
              )
              
              -
              
              
              (506,975
              )Net
                  Income (loss)
              
              $
              696,925
              
              $
              (52,324
              )
              $
              644,601Net
                  income (loss) per share - basic and diluted
              
              $
              0.10
              
              $
              (0.02
              )Weighted
                  average number of common shares
                Outstanding
                  - basic and diluted
              
              
              6,929,538
              
              
              2,156,250




**See
      notes to financial statements.**




F-4




Apex
      Bioventures Acquisition Corporation


(a
      development stage company)


Statements
      of Stockholders’ Equity (Deficiency)


For
      the
      period from June 1, 2006 (Inception) to December 31, 2007




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 $0.00159 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’ discountand
                  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
              
              $
              45,798,034




**See
      notes to financial statements.**




F-5




Apex
      Bioventures Acquisition Corporation


(a
      development stage company)


Statements
      of Cash Flows


Year
                  Ended
                December
                  31, 2007
              
              Period
                  from June 1, 2006 (Inception) to December 31, 2006
              
              Period
                  from June 1, 2006 (Inception) to
                December
                  31, 2007Cash
                  flows from operating activitiesNet
                  income (loss)
              
              $
              696,925
              
              $
              (52,324
              )
              $
              644,601Adjustments
                  to reconcile net income (loss) to net cash used in operating
                  activitiesDeferred
                  income taxes
              
              
              (198,106
              )
              
              -
              
              
              (198,106
              )Dividends
                  earned on trust account
              
              
              (1,773,142
              )
              
              -
              
              
              (1,773,142
              )Change
                  in operating assets and liabilitiesPrepaid
                  expenses
              
              
              (66,244
              )
              
              -
              
              
              (66,244
              )Accounts
                  payable and accrued expenses
              
              
              105,210
              
              
              11,000
              
              
              116,210Income
                  taxes payable
              
              
              704,281
              
              
              -
              
              
              704,281Net
                  cash used in operating activities
              
              
              (531,076
              )
              
              (41,324
              )
              
              (572,400
              )Cash
                  flows from investing activitiesDisbursements
                  from trust account
              
              
              1,518,454
              
              
              -
              
              
              1,518,454Cash
                  held in trust account
              
              
              (67,330,000
              )
              
              -
              
              
              (67,330,000
              )Net
                  cash used in investing activities
              
              
              (65,811,546
              )
              
              -
              
              
              (65,811,546
              )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 loans from stockholders
              
              
              -
              
              
              225,000
              
              
              225,000Repayment
                  of loans from stockholders
              
              
              (225,000
              )
              
              
              
              
              (225,000
              )Proceeds
                  from advances from stockholders
              
              
              146,895
              
              
              4,170
              
              
              151,065Repayment
                  of advances from stockholders
              
              
              (148,289
              )
              
              -
              
              
              (148,289
              )Proceeds
                  from sale of option to underwriters
              
              
              100
              
              
              -
              
              
              100Proceeds
                  from the sale of common stock
              
              
              -
              
              
              25,000
              
              
              25,000Payment
                  of offering expenses
              
              
              (3,253,396
              )
              
              (130,107
              )
              
              (3,383,503
              )Cash
                  provided by financing activities
              
              
              67,320,310
              
              
              124,063
              
              
              67,443,373Net
                  increase in cash and cash equivalents
              
              
              977,688
              
              
              82,739
              
              
              1,060,427Cash
                  and cash equivalents, beginning of period
              
              
              82,739
              
              
              -
              
              
              -Cash
                  and cash equivalents, end of period
              
              $
              1,060,427
              
              $
              82,739
              
              $
              1,060,427Supplemental
                  schedule of non cash financing activities:Accrual
                  of offering costs
              
              $
              9,797
              
              $
              185,807
              
              $
              9,797Accrual
                  of deferred underwriting fees
              
              $
              2,070,000
              
              $
              -
              
              $
              2,070,000




**See
      notes to financial statements.**




F-6




Apex
      Bioventures Acquisition Corporation


(a
      development stage company)


Notes
      to
      Financial Statements


December
      31, 2007







**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, 2007 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 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 personally 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.




F-7




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.




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 December 31, 2007 balance
      sheet.




The
      Company’s 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. If the
      Company has not completed a Business Combination by such date, its corporate
      existence will cease and, subject to stockholder approval, it will dissolve
      and
      liquidate for the purposes of winding up its affairs. In the event of
      liquidation, it is likely that the per share value of the residual assets
      remaining available for distribution (including Trust Fund assets) will be
      less
      than the initial public offering per share in the Public Offering (assuming
      no
      value is attributed to the Warrants contained in the Units sold in the Public
      Offering discussed in Note 3).




**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. However, management believes the Company is not
      exposed to significant credit risk due to the financial position of the
      depository institutions in which those deposits are held.




F-8




**Reclassifications**




For
      comparability, certain 2006 amounts have been reclassified, where appropriate,
      to conform to the financial statement presentation used in 2007.




**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, 2007 and 2006.




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.




**New
      Accounting Pronouncements**




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.




In
      December 2007, the Financial Accounting Standards Board 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 and will impact financial statements
      both on the acquisition date and in subsequent periods.




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. Upon adoption of SFAS 160, the Company will re-classify
      any non-controlling interests as a component of equity.




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.




**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.




F-9




**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.




**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.




**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. Consequently,
      the Warrants may 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.




F-10




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 (see Note 8). 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.




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.




F-11




**Note
      4 -- Related Party Transactions**




**[A]**  On
      June
      15, 2006 the Company issued three $50,000 unsecured promissory notes to related
      parties, K. Michael Forrest, Easton Associates LLC (the largest equity holder
      of
      which was at that time Robert J. Easton) and Treasure Road Partners, LTD. (an
      entity controlled by Gary E. Frashier and his wife, Giva Frashier). Each note
      was non-interest bearing and, except for the note to Easton Associates LLC
      described below, each was repaid upon consummation of the Public Offering.
      Messrs. Forrest, Easton and Frashier are officers and directors of the
      Company.




On
      June
      30, 2006, the Company issued three $25,000 unsecured promissory notes to related
      parties, K. Michael Forrest, Easton Associates LLC (the largest equity holder
      of
      which was at that time Robert J. Easton) and Treasure Road Partners, LTD. (an
      entity controlled by Gary E. Frashier and his wife, Giva Frashier). Each note
      was non-interest bearing and, except for the note to Easton Associates LLC
      described below, each was repaid upon consummation of the Public
      Offering.




In
      October 2006, Mr. Easton terminated his association with Easton Associates,
      LLC.
      As a result of such termination, in April 2007, the Company repaid in full
      the
      $75,000 loaned to the Company. Subsequently, Mr. Easton loaned the Company
      $75,000 which was repaid upon consummation of the Public Offering. As mentioned
      above, Mr. Easton is a director of the Company.




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, 2007, accounts payable includes $2,776 due to officers and
      directors for operating costs incurred on behalf of the Company.




**[B]**  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.




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.




**[C]**  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.




In
      October 2006, Robert J. Easton, who previously held the largest membership
      interest in Easton Associates, LLC, terminated his association with Easton
      Associates, LLC. Subsequently, in April 2007, the Company purchased from Easton
      Associates, LLC all of the shares of our common stock held by Easton Associates,
      LLC for $4,096.35 in cash. Subsequently, Mr. Easton purchased from the Company
      the same number of shares for $4,096.35.




F-12




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
      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.




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.




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.




**Note
      5 - Income Taxes**




The
      provision for income taxes for the year ended December 31, 2007 consists of
      the
      following:




Current:Federal
            
            $
            559,532State
            
            
            145,549Total
                current
            
            
            705,081Deferred:Federal
            
            
            (198,106
            )State
            
            
            -Total
                deferred
            
            
            (198,106
            )$
            506,975




As
      of
      December 31, 2007 and 2006, the tax effect of temporary differences that give
      rise to the net deferred tax asset is as follows:




2007
            
            2006Expense
                deferred for income tax purposes
            
            $
            240,494
            
            $
            18,313Valuation
                allowance
            
            
            (42,388
            )
            
            (18,313
            )$
            198,106
            
            $
            -




F-13




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.




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
      year
      ended December 31, 2007 and the period from inception (June 1, 2006) to December
      31, 2006 is as follows:




2007
            
            2006Statutory
                U.S. federal rate
            
            
            34.0
            %
            
            34.0
            %State
                income taxes, net of federal effect
            
            
            8.0
            %
            
            5.5
            %Non-deductible
                expenses
            
            
            0.4
            %Valuation
                allowance
            
            
            (0.3
            %)
            
            (39.5
            %)Effective
                Tax Rate
            
            
            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, 2007, 11,325,000 shares of common stock were reserved for issuance
      upon exercise of redeemable warrants and the underwriters’ purchase
      option.




**Note
      8 - Subsequent Events (unaudited)**




On
      February 5, 2008, the Company and its wholly-owned subsidiary, Apex Acquisition
      Sub, Inc. (incorporated in January 2008) also a Delaware corporation
      (“Acquisition Sub”), entered into an Agreement and Plan of Merger (the “Merger
      Agreement”) with Dynogen Pharmaceuticals, Inc., a Delaware corporation
      (“Dynogen”) and Kate Bingham and Michael Bigham, acting jointly as
      representatives of the Company Holders (defined in the Merger Agreement to
      refer
      collectively to the holders of Dynogen capital stock, options, warrants and
      other securities), pursuant to which Acquisition Sub will merge with and into
      Dynogen and Dynogen will become a wholly-owned subsidiary of Apex (the
“Merger”). Upon the Merger, Apex will be renamed “Dynogen Pharmaceuticals, Inc.”
and Dynogen will be renamed “Dynogen, Inc.” following the Merger, Dynogen will
      effectively become a public company.




Dynogen
      is a clinical stage pharmaceutical company developing more effective treatments
      for gastrointestinal and genitourinary disorders. Dynogen has an advanced
      pipeline of clinical development programs focused on attractive and untapped
      markets in disease areas that severely impair a patient’s quality of life, such
      as irritable bowel syndrome, gastroesophageal reflux disease and overactive
      bladder.




The
      acquisition is expected to be consummated in the second quarter of 2008, after
      the required approval by the stockholders of Apex and the fulfillment of certain
      other conditions.




F-14




*Closing
      Merger Consideration*




In
      exchange for all of the capital stock of Dynogen outstanding immediately prior
      to the acquisition, Apex will initially issue shares of its common stock, valued
      at approximately $98 million, based on a per share value of $7.27, representing
      the volume weighted average closing price of Apex’s common stock as reported by
      the American Stock Exchange during the 20 trading days immediately preceding
      the
      signing of the Merger Agreement (the “Signing Price”).




*Milestone
      Payments*




Holders
      of Dynogen capital stock and vested options to acquire Dynogen common stock
      will
      also be entitled to receive additional shares of Apex common stock upon the
      occurrence of two milestone events (or the earlier sale of Apex or Dynogen)
      as
      more fully described in the Merger Agreement. Upon the occurrence of each such
      milestone, Dynogen stockholders and optionholders shall receive shares of Apex
      common stock, each tranche valued at approximately $23 million (or $46 million
      in the aggregate), based upon the Signing Price.




*Assumption
      of Options and Warrants*




At
      the
      closing of the Merger, all outstanding options and warrants to acquire shares
      of
      Dynogen capital stock will be assumed by Apex and each Dynogen option and
      warrant will become options or warrants, as applicable, to acquire common stock
      of Apex, on substantially the same terms and conditions as were applicable
      under
      the Dynogen option or warrant, as applicable. The number of shares of Apex
      common stock underlying such options and warrants, and the related per share
      exercise price, will be determined by reference to the Signing Price and will
      be
      in addition to the shares of Apex common stock valued at approximately $98
      million.




*Interim
      Financing*




As
      permitted under the Merger Agreement, on February 20, 2008, Dynogen entered
      into
      a Loan and Security Agreement (the “Loan and Security Agreement”) with Silicon
      Valley Bank (“SVB”) and Oxford Finance Corporation (“Oxford,” and together with
      SVB, the “Lenders”). Pursuant to the Loan and Security Agreement, Dynogen
      borrowed an initial tranche of $5 million from the Lenders, evidenced by two
      secured promissory notes, each in the amount of $2.5 million issued to SVB
      and
      Oxford, respectively. Subject to satisfaction of conditions of the Lenders
      set
      forth in the Loan and Security Agreement, Dynogen may borrow a second tranche
      from the Lenders of up to $5 million on or before April 30, 2008.




The
      term
      loans are due and payable on or before March 1, 2011, subject to any earlier
      event of default. The term loans bear interest at a rate equal to the greater
      of
      10% or LIBOR plus six percentage points at issuance. Dynogen will repay only
      interest through September 30, 2008, with the first principal payment due on
      October 1, 2008; provided, however, in the event the Merger is not completed
      by
      September 30, 2008, Dynogen shall, in addition, repay principal for the period
      since the loan issuance. Dynogen has granted the Lenders a security interest
      in
      all assets of the Company other than intellectual property and agreed not to
      pledge its intellectual property to secure other obligations or agree to any
      such negative pledge with another party.




On
      February 20, 2008, in connection with the Loan and Security Agreement, Dynogen
      issued a warrant to each of SVB and Oxford. Each warrant will become exercisable
      for 36,108 shares of our common stock subject to and upon the closing of the
      Merger at an initial exercise price of $7.27 per share and shall be exercisable
      for a period of four years from the date of the Merger. In the event the Merger
      Agreement is terminated for any reason, the warrants will become exercisable
      for
      337,500 shares of the Series B Convertible Preferred Stock at an initial
      exercise price of $1.10 per share or, at the at the option of the holder, other
      senior preferred stock of Dynogen issued for financing purposes at an initial
      exercise price equal to the lowest per share purchase price for such preferred
      stock, and shall be exercisable for a period of seven years from the original
      issue date of the warrant. The shares acquired upon exercise of such warrants
      shall be subject to a one hundred and eighty day lock-up period from the date
      of
      the Merger in the event the warrants become exercisable for our common stock.




F-15




In
      the
      event that the second tranche is drawn down by Dynogen, the warrants will become
      exercisable for an additional 12,035 shares of our common stock, if the warrants
      become exercisable for our common stock or an additional 112,500 shares of
      Dynogen’s preferred stock, if the Merger Agreement is terminated for any reason.




F-16