UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark one)

/x/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                    FOR THE FISCAL YEAR ENDED: JUNE 30, 2008

/_/    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

Commission file number: 33-19598

                                    VYTA CORP
                              -------------------
        (Exact name of small business issuer as specified in its charter)

           NEVADA                                        84-0992908
--------------------------------            ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                           370 17TH STREET, SUITE 3640
                             DENVER, COLORADO 80202
                                 (303) 592-1010
                         ------------------------------
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)


Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

         Indicate  by  check  mark if the  registrant  is not  required  to file
reports pursuant to Section 13 or Section 15(d) of the Act. /_/

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

         Check if there is no disclosure of delinquent  filers  pursuant to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will 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-KSB
or any amendment to this Form 10-KSB. /x/

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

<PAGE>

         As of the close of trading on October 10, 2008,  there were  45,013,178
shares  outstanding,  32,908,823  of  which  were  held by  non-affiliates.  The
aggregate market value of the common shares held by non-affiliates, based on the
average  closing bid and asked  prices on October 10,  2008,  was  approximately
$1,809,985.

         The  registrant's  revenue  for the fiscal year ended June 30, 2008 was
$0.

         Transitional Small Business Disclosure  Yes /_/  No/x/



<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS

                                                                                                            PAGE NUMBER
                                                                                                            -----------
<S>                                                                                                         <C>
FORWARD-LOOKING STATEMENTS                                                                                        1

PART I                                                                                                            1

ITEM 1.     DESCRIPTION OF BUSINESS                                                                               1
ITEM 2.     DESCRIPTION OF PROPERTY                                                                              18
ITEM 3.     LEGAL PROCEEDINGS                                                                                    18
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                  19

PART II                                                                                                          20

ITEM 5.     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF         20
            EQUITY SECURITIES
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                            21
ITEM 7.     FINANCIAL STATEMENTS                                                                                 27
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                 27
ITEM 8A.    CONTROLS AND PROCEDURES                                                                              27
ITEM 8B.    OTHER INFORMATION                                                                                    28

PART III                                                                                                         29

ITEM 9.     DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY                                                      29
ITEM 10.    EXECUTIVE COMPENSATION                                                                               31
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS       35
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                       37
ITEM 13.    EXHIBITS                                                                                             37
ITEM 14.    PRINCIPAL ACCOUNTANTS' FEES AND SERVICES                                                             38
</TABLE>



<PAGE>

                           FORWARD-LOOKING STATEMENTS

         This Annual Report on Form 10-KSB includes "forward-looking statements"
within the meaning of Section 21E of the  Securities  Exchange  Act of 1934,  as
amended.  We base these forward looking  statements on our current  expectations
and  projections  about future  events.  These forward  looking  statements  are
subject to risks, uncertainties, and assumptions about our company, including:

         O        the operations and potential  profitability of BioAgra, LLC, a
                  company in which we have a 50% interest;

         O        the rate of  market  development  and  acceptance  of our beta
                  glucan products in the animal and aquatic animal feed industry
                  within which we are concentrating our business activities;

         O        the rate of  market  development  and  acceptance  of our beta
                  glucan products for human consumption;

         O        our  ability to compete  successfully  with  growth  promotion
                  antibiotic   manufacturers   and  other   providers   of  feed
                  additives;

         O        the  operations  and potential  profitability  of  ExypnoTech,
                  Gmbh,  a  company  in  which  we have a 49%  interest  that is
                  manufacturing  and  developing  inlay  components  used in the
                  manufacturing  of  radio  frequency   identification   devices
                  ("RFID"), such as smart labels, smart cards and smart tags;

         O        the  limited   revenues  and  significant   operating   losses
                  generated by us to date;

         O        the possibility of significant  ongoing  capital  requirements
                  and our ability to secure financing as and when necessary;

         O        our ability to retain the services of our key management,  and
                  to attract new members to the management team; and

         O        our ability to obtain and retain appropriate patent, copyright
                  and trademark  protection for our intellectual  properties and
                  any of our products.

         These  forward-looking  statements  include  statements  regarding  our
expectations,  beliefs,  or  intentions  about  the  future,  and are  based  on
information  available to us at this time. We assume no obligation to update any
of these statements and specifically decline any obligation to update or correct
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or  unanticipated
events.  Actual events and results could differ materially from our expectations
as a result of many factors,  including  those  identified in the section titled
"Item 1.  Description  of  Business--Risk  Factors"  and other  sections of this
report.  We urge you to review and consider those factors,  and those identified
from time to time in our reports and filings  with the  Securities  and Exchange
Commission,  for information about risks and  uncertainties  that may affect our
future results.  All  forward-looking  statements we make after the date of this
filing are also qualified by this cautionary statement and identified risks.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

         We were  incorporated  on June  22,  1996 as a Nevada  corporation.  In
January 2006,  we changed our name from  NanoPierce  Technologies,  Inc. to Vyta
Corp. Our corporate offices are located at 370 17th Street,  Suite 3640, Denver,

                                      -1-
<PAGE>

Colorado  80202,  and our  telephone  number is (303)  592-1010.  We  maintain a
website at  www.vytacorp.com,  which is not incorporated in and is not a part of
this report.

         When used in this report,  the terms "we,"  "our," "us," "the  company"
and similar expressions refer to Vyta Corp, BioAgra,  LLC, ExypnoTech,  Gmbh and
our subsidiaries, unless the context otherwise requires.

BUSINESS

GENERAL

         In 2004,  we  instituted  steps to change our  principal  business from
electronics  technology  to  biotechnology.  In August 2005,  we purchased a 50%
equity  interest in  BioAgra,  LLC, a Georgia  limited  liability  company.  The
remaining 50% was purchased by Xact Resources  International  and later assigned
to Justin Holdings,  Inc., both unaffiliated parties.  BioAgra is engaged in the
production,  marketing and sale of Agrastim(R),  a natural,  non-toxic  purified
beta-1,3/1,6-D glucan feed additive used to replace growtH promotion antibiotics
that are currently in use in the animal feed industry. In addition to its use as
a feed additive,  BioAgra intends to include Agrastim(R) in premixed feeds, such
as in  EquiForce(TM),  a feed  targeted for the equine  industry  that  contains
Agrastim(R),  vitamins and minerals  formulated to supply  nutrients to meet the
physiological needs of equine athletes and to boost theiR immune systems.

         BioAgra  is also  producing  Purestim(TM),  a  purified  beta-1,3/1,6-D
glucan intended for use by other companies that manufacture  neutraceuticals and
dietary  supplements for human consumption,  and is designing other products for
human,  animal  and  aquaculture  consumption  based on beta  glucan  and  other
immunoenhancers. Purestim(TM), together with Agrastim(R), are sometimes referred
to herein as "beta glucan products."

         Prior to our  acquisition of an interest in BioAgra,  we were primarily
involved in our  patented  particle  interconnect  technology.  We acquired  the
particle  technology  in  February  1998 to  pursue  a more  focused,  strategic
application and development of the particle  technology and to commercialize the
technology as the NanoPierce Connection System (NCSTM). While we do not plan, at
this time, to continue  efforts to manufacture or develop  products that utilize
our particle technology, we have entered into two provisional technology license
agreements for the manufacture,  development and marketing of products using our
particle  technology.  However,  to date,  neither  agreement has matured into a
full-scale commercial license generating royalty and license revenues for us.

RECENT DEVELOPMENTS

         On December 27,  2007,  we sold our 49%  interest in  ExypnoTech,  Gmbh
("ExypnoTech")  to TagStar  Systems,  GmbH for $250,000 cash pursuant to a share
purchase agreement. ExypnoTech is a company that manufactures and develops radio
frequency  identification  ("RFID")  components used in the production of, among
other  things,  smart  labels,  smart cards and smart tags.  As a result of this
sale,  we no longer have any interest in  ExypnoTech,  and TagStar  Systems owns
100% of ExypnoTech

         In addition,  the United States is experiencing  severe  instability in
the  commercial and  investment  banking  systems which is likely to continue to
have  far-reaching  effects  on the  economic  activity  in the  country  for an
indeterminable period. The long-term impact on the United States economy and the
Company's operating  activities and ability to raise capital cannot be predicted
at this time, but may be substantial.

BIOAGRA, LLC

BUSINESS STRATEGY

         Governments  are  currently   urging,   and  consumers  are  demanding,
producers  to remove  growth  promotion  antibiotics  from the human  food chain
supply to reduce the development in humans of increasingly powerful and virulent
strains of  antibiotic-resistant  bacteria,  which makes treatment for illnesses
and diseases more difficult and expensive. In addition,  consumers are demanding
more natural, organic, antibiotic-free foods.

         Animals in the cattle, dairy, poultry,  turkey, duck, equine, and swine
industries  and  aquatic  animals,  such as  shrimp,  are  currently  fed growth
promotion antibiotics.  BioAgra is targeting the cattle, dairy, poultry, turkey,

                                      -2-
<PAGE>

duck and swine  industries  for the sale of  Agrastim(R)  as an  alternative  to
growth  promotion  antibiotics  used in feed.  BioAgra is  targeting  the equine
industry with a product called  EquiForce(TM) that contains  Agrastim(R) and has
been formulated to supply  nutrients to meet the  physiological  needs of equine
athletes and to boost their immune systems.

         BioAgra  has also  begun  producing  and  marketing  a new beta  glucan
product  under the name  Purestim(TM).  This product is sold to  companies  that
manufacture  neutraceuticals  and  dietary  supplements  for human  consumption.
BioAgra's beta glucan products may be targeted for other uses in the future.

BACKGROUND  ON BETA  GLUCAN  PRODUCTS  AND THE NEED FOR  ALTERNATIVES  TO GROWTH
PROMOTION ANTIBIOTICS

         Agrastim(R)  and  Purestim(TM)  are  produced  from spent  brewer's  or
distillery  yeast.  The beta glucan  products  are a  combination  of  bioactive
nutrients  and B-glucans  that are extracted  from the cell walls of yeast using
steam injection and a centrifuging extraction process. Beta glucan is a natural,
non-toxic  product  that has been shown to stimulate  immune  systems in animal,
poultry and other  organisms.  Independent  test  results  were  published in an
article  titled  "THE  INFLUENCE  OF  B-GLUCAN  ON IMMUNE  RESPONSES  IN BROILER
CHICKENS"  ("IMMUNOPHARMACOLOGY  AND IMMUNOTOXICOLOGY,"  Volume 25, 2003 (Marcel
Dekker)),  demonstrating the stimulation of the broiler chicken's immune systems
by the  B-glucan.  BioAgra's  beta glucan  products  are designed to enhance the
immune system and to promote accelerated growth in various organisms.

         Antibiotics  have  been  added to animal  feed in an effort to  produce
healthier animals and to promote faster growth. Scientists, however, now believe
that this practice may lead to unforeseen and unwanted effects. Some studies and
articles  indicate that growth promotion  antibiotics  contained in animal feeds
may  accumulate  in the  animal  body and can cause  harm to  humans,  including
causing allergic and abnormal reactions.

         The  excessive  use  of  antibiotics,   especially   growth   promotion
antibiotics,  in animal feed may convert some bacteria into antibiotic-resistant
strains of  bacteria  that can infect  humans  through the  consumption  of meat
products.  When a human  develops a  resistant  strain of  bacteria,  it becomes
difficult  and  expensive  to  treat  due  to  the   bacteria's   resistance  to
antibiotics.  The use of  antibiotics  in animal feed has already  affected many
countries in Europe,  which have banned the use of growth promotion  antibiotics
in animal feed.  It is expected  that the United States may also begin to ban or
discourage the use of these antibiotics in animal feed.

         Alternatives to antibiotics, including Agrastim(R), are increasingly in
demand by animal farmers and other producers  because they lack the drawbacks of
antibiotics and other chemical  compounds.  Agrastim(R) is a natural,  non-toxic
product that has been proven to stimulate  immune systems,  thereby  eliminating
the usage of  antibiotics  and  growth  hormone  supplements  in  animal  feeds.
Agrastim(R) is designed to enhance the immune system and to promote  accelerated
growth.  We believe  Agrastim(R) as a feed additive can help resolve the harmful
effects  of growth  promotion  antibiotics  that can be toxic to humans  and can
produce safe and healthy animal feed that may be claimed as "drug-free."

         MANUFACTURING OF THE BETA GLUCAN PRODUCTS

RAW MATERIALS

         BioAgra  produces  its beta  glucan  products  from spent  brewer's  or
distillery  yeast.  Brewer's  yeast  is  used  in the  production  of  alcoholic
beverages.  Currently,  yeast and other raw materials utilized in the production
of the beta glucan products are purchased from a Brazilian  supplier pursuant to
invoices  documenting  each  separate  purchase.  The yeast is  consistent  with
BioAgra's  production needs and such  arrangements  currently are not subject to
any volume limitations or import restrictions.  Arrangements are being made with
additional  commercial  firms that purchase and distribute these types of yeast.
BioAgra believes that there is an adequate supply of these raw materials for the
foreseeable  future  for  BioAgra's  proposed  activities.  BioAgra  intends  to
purchase these raw materials from other available  worldwide  suppliers that can
provide a cost  efficient  source of high quality raw materials that will permit
it to produce a purified beta glucan product that is at least 80% pure.

                                      -3-
<PAGE>

PRODUCTION PLANT

         BioAgra's   production  plant  is  located  at  103  Technology  Drive,
Hinesville,  Georgia  31313.  BioAgra has leased the  facility  from the Liberty
County  Industrial  Authority  pursuant to an Industrial Lease Agreement,  dated
March 1, 2005,  for a period of 120  calendar  months at  $12,000  per month (of
which  certain  amounts have been paid other than  monthly as  permitted  by the
lessor). At the expiration of the lease term, BioAgra has the option to purchase
the leased premises (real estate and improvement) for $500,000.  The facility is
approximately  30,000  square  feet,  consisting  of  both  office  space  and a
production  area and is also  expected  to  include a research  and  development
laboratory.  The  production  area  has  enough  space  to hold  three  separate
production lines in its current configuration, although as of this date, BioAgra
only has a single production line. The facility is located on approximately 7.29
acres.

         The plant commenced operations in March of 2006. The plant went through
a shakedown period in which BioAgra evaluated and better understood the controls
and efficiencies of the plant.  BioAgra started operating at full-scale capacity
in April of 2006.  The  production  line has a designed  capacity  of  producing
10,000  kilograms of  Agrastim(R)  per month.  BioAgra has  approximately  2,000
kilograms of packaged and drummed pure Agrastim(R) finished and on the floor for
sale and delivery.  It has discontinued  production at this time until demand is
sufficiently strong to justify continued production.

PRODUCTION PROCESS

         In manufacturing the beta glucan product, the cell walls of the baker's
or distillery yeast are exposed to high temperatures using steam injection.  The
mixture is then  separated into solid and liquid  portions by a centrifuge,  and
the liquid  portion is discarded.  The solid  portion is thoroughly  washed with
water  and  then  exposed  to  elevated   temperatures  using  stream  injection
extracting  a  residue.  The  residue is  separated  again into solid and liquid
portions by a centrifuge and the liquid portion is discarded. Finally, the solid
portion is  thoroughly  washed with water and the residue is spray dried,  which
results in the beta glucan product.

         Agrastim(R)  is a  concentrate  that many farmers or producers  will be
unable to mix with feed in the required proportions.  Therefore, BioAgra expects
to produce  specialized  premixes  containing  Agrastim(R)  and vitamins  and/or
mannoproteins.   Mannoproteins   are   purified   from  the  yeast   during  the
manufacturing  process.  BioAgra  will be able to  sell to a  broader  array  of
customers through the production of premixed products. EquiForce(TM), a premixed
product designed for and marketed to the racing and sport horse industry, is one
of BioAgra's first premixed products and is a combination of vitamins,  minerals
and Agrastim(R).

         Purestim(TM)  is a  concentrate  that is being  marketed and sold as an
additive to companies  that  manufacture  and sell  neutraceuticals  and dietary
supplements. These companies will purchase the Purestim(TM) as an ingredient for
inclusion in existing products.  There has been limited sales of Purestim(TM) to
customers of AHD International.

         EMPLOYEES

         BioAgra  has three  employees.  In  addition  to its two  managers  and
executive  officers,  there is one employee  employed as Plant  Manager,  one as
Research and Development  Director and one as Administrative  Assistant.  During
production cycles,  BioAgra hires additional employees consisting of one manager
and two  crew  members  for  each of two 12 hour  shifts.  When  BioAgra  begins
full-scale  operations,  these temporary employees are expected to be hired on a
full-time basis.

MARKETING AND DISTRIBUTION

         BioAgra is focusing  its initial  marketing  efforts on the animal feed
industry.  BioAgra  has  targeted  its efforts in the State of Georgia and those
states in which the vast majority of poultry  producers in the United States are
located. The initial marketing strategy was to penetrate the poultry industry by
utilizing  existing  industry  distributors  or direct  sales on a national  and
international  basis. BioAgra also marketed Agrastim(R) by attendance at various
poultry-related conventions.  After successful testing of Agrastim(R) with other

                                      -4-
<PAGE>

animals,  BioAgra has expanded the scope of its marketing to include the cattle,
dairy, swine, aquatic animal, equine and dietary supplement industries.

         In addition to BioAgra's agreement with AHD International, LLC, BioAgra
has  one  independent  distributor,  Agra  Nutrition,  LLC,  that  is  marketing
Agrastim(R) on a national basis and in India.  Agra  Nutrition,  LLC is owned by
Mr. Warren Robold who also functions as Director of U.S. and International Sales
for BioAgra.

POULTRY AND TURKEY INDUSTRY

         Poultry  is the  largest  worldwide  source of  protein  food for human
consumption.  In addition, poultry can be raised in small geographical areas. In
the United States,  approximately 8 billion chickens and 275 million turkeys are
farmed for "broiler"  production and processing  each year. Each broiler chicken
consumes  an average of 10 pounds of feed during its  approximately  42 day life
span for a total of 40 million tons of feed for all the broiler  chickens in the
United States each year. Each turkey consumes  approximately  110 pounds of feed
for a total of 13.75 million tons of feed. In addition,  there are approximately
450 million egg producing  chickens raised in the United States each year, which
consume  approximately 132 pounds of feed over a period of 1.5 years for a total
of 27 million tons of feed.

CATTLE INDUSTRY

         The United States has the largest fed-cattle industry in the world, and
is the world's largest  producer of beef for domestic and export use.  According
to the National  Cattleman's  Beef  Association,  there are roughly 800,000 beef
producers in the United  States and  approximately  97.1  million  cattle in the
United States.  During the production process,  cattle usually spend four to six
months in a feedlot,  during which time they are fed  scientifically  formulated
rations.  Producers  and  veterinarians  take great care to use only the optimal
amount of  antibiotics  needed to maintain an animal in good health.  The United
States government through the National AntiMicrobal Resistance Monitoring System
strictly tracks  antibiotic  resistance as well as products and interventions to
assure the safety of the cattle as well as the beef supply.

DAIRY INDUSTRY

         According to Best Food Nation, a group of associations representing all
levels  of the food  chain,  there  are  approximately  65,000  dairy  farms and
approximately  9,041,000 dairy cows in the United States.  Each year, the United
States  produces over 1 billion pounds of butter,  more than 7 billion pounds of
cheese, over 1 billion pounds of nonfat dry milk, 1.5 billion pounds of yogurts,
and 1 billion  gallons of ice cream.  Dairy cows eat  roughly 100 pounds of feed
each day. Dairy farmers typically employ  professional  nutritionists to develop
scientifically  formulated  diets for their cows. If a cow is being treated with
antibiotics, she is taken out of the milking herd and not put back into the herd
until her milk tests free of antibiotics.  Applicable  regulations require every
tank load of milk entering  dairy  processing  plants to be strictly  tested for
animal drug residues.  The United States dairy  industry  conducts more than 3.5
million  tests  each year to ensure  that  antibiotics  are kept out of the milk
supply.  Any tanker  that tests  positive  is  disposed  of  immediately,  never
reaching the public.

SWINE INDUSTRY

         Another  industry  where the use of  antibiotics  among  animals  is of
concern is the swine  industry.  According to the United  States  Department  of
Agriculture,  pork is the  number one meat  consumed  in the world and there are
approximately  70,000 hog farms in the United States today.  Antibiotics  may be
given to prevent or treat disease in hogs;  however,  a  "withdrawal"  period is
required  from  the  time  antibiotics  are  administered  until  it is legal to
slaughter the animal.  Pigs fed  antibiotics are segregated so that residues can
exit the  animal's  system and not be present  in the meat.  Recently,  the pork
industry has established programs to encourage producers to implement management
practices that reduce the need for antibiotics, and to use antibiotics only when
other management  practices do not, or will not, succeed in managing a correctly
diagnosed problem.

                                      -5-
<PAGE>

AQUACULTURE INDUSTRY

         Aquaculture is defined as the production of aquatic  animals and plants
under controlled conditions for all or part of their lifecycle. According to the
United States Department of Agriculture's Economic Research Service,  during the
last two decades,  the value of United  States  aquaculture  production  rose to
nearly $1 billion  and is one of the  fastest  growing  food-producing  sectors.
According  to the  INTERNATIONAL  TRADE  REPORT  produced  in 2005 by the United
States  Department of  Agriculture,  U.S.  per-capita  seafood  consumption  has
remained  around 15 pounds  through the late 1980s and 1990s,  it is expected to
increase as farm-raised  products become cheaper.  Currently,  the United States
consumes nearly 12 billion pounds of fish a year. By 2025, demand for seafood is
projected to grow by another 4.4 billion pounds above what is consumed today. In
addition,  it is estimated  that by 2020, 50 percent of the U.S.  seafood supply
will come from aquaculture.

EQUINE INDUSTRY

         In addition to the use of  Agrastim(R) as an alternative to antibiotics
in animal  feed,  BioAgra has  developed a product with  Agrastim(R)  focused on
racing and performance horses.  Racing and performance horses are subject to the
outbreak of debilitating  and deadly  diseases,  such as the Equine  Herpesvirus
type 1 that killed six horses in an outbreak  in  December  2006 in  Wellington,
Florida.  BioAgra's  EquiForce(TM)  product has been designed to supply vitamins
and  minerals  needed to meet the  physiological  needs of equine  athletes.  In
addition,  EquiForce(TM)  contains Agrastim(R) to boost equine immune systems to
aid in suppressing  bacterial and viral  infections  and increasing  stamina and
resistance to stress. A trial of the  EquiForce(TM)  product was conducted by an
equine  veterinarian  at Fort Valley State  University  in Fort Valley,  Georgia
showing  positive  immune  responses in a controlled  study.  BioAgra expects to
obtain its first commercial scale order for the product in the near future.

NEUTRACEUTICALS AND DIETARY SUPPLEMENT INDUSTRY

         Annual  sales  of  supplements,   fortified  foods  and  beverages  and
neutraceuticals  for human consumption in the United States, are estimated to be
approximately  $100  billion.  The  vitamins,  minerals and  supplements  market
reached its present size due to a number of factors,  including  (i) interest in
healthier  lifestyles,  living longer and living well,  (ii) the  publication of
research findings  supporting the positive health effects of certain nutritional
supplements and (iii) the aging of the "baby boom" generation  combined with the
tendency of consumers to purchase more nutritional supplements and natural foods
as they age. BioAgra is considering the sale of Purestim(TM) as a supplement for
introduction by outside companies into packaged products for human consumption.

CUSTOMERS

         BioAgra is  targeting a broad  range of  customers  consisting  of both
large and small consumers of animal feed both nationally and  internationally to
avoid dependency on one or a small number of customers. In addition,  BioAgra is
beginning to target neutraceutical and dietary supplement producers for the sale
of Purestim(TM) as an additive in their existing products for human consumption.

         On  April  1,  2007,  BioAgra  and AHD  International,  LLC  signed  an
agreement whereby AHD International agreed to purchase beta glucan products from
BioAgra.  The agreement  has a term of five years with the right for  successive
renewals  provided minimum sales  requirements  are met. The agreement  provides
that AHD International  will purchase beta glucan products for resale to various
end users in thirteen  countries.  The agreement  grants AHD  International  the
exclusive  right to sell the beta glucan products to all users in ten countries,
including,  Canada, Chile, Brazil, Japan, Vietnam, South Korea,  Australia,  New
Zealand,  Germany and Denmark.  In addition,  the agreement  grants the right to
sell the beta glucan products in an additional  three  countries  (South Africa,
Mexico and the United  States),  with the exclusivity of such right dependant on
the type of end user sold to and the country involved.

         Mid South Feeds of Alma,  Georgia began adding Agrastim(R) to its top 5
premium  lines of dog food and its top 2  premium  brands  of horse  feed in May
2006. In addition,  Mid South Feeds has recently begun to add Agrastim(R) to its
equine vitamin  supplement,  Equi-Match,  which has been designed to be fed as a

                                      -6-
<PAGE>

top-dress supplement for horses in training, competition and recovery. Mid South
Feeds  has  over  175  distributors  in  Florida,  Georgia,  Alabama,  Virginia,
Kentucky, North Carolina and South Carolina. Besides manufacturing dog and horse
feed,  Mid South also  manufactures  fish and shrimp feed,  and starter feed for
dairy cattle and swine.  To date,  sales of  Agrastim(R)  by MidSouth  have been
limited.

MANAGEMENT

MANAGERS AND OFFICERS

         BioAgra is a  manager-managed  Georgia limited liability  company.  The
managers and officers of BioAgra are as follows:

            NAME                             POSITION
------------------------     --------------------------------------
Neal Bartoletta              Manager, President and Chief Executive
                             Officer

Paul H. Metzinger            Manager, Executive Vice President,
                             Chief Financial Officer and Secretary

BIOGRAPHICAL INFORMATION

         Biographical  information regarding Mr. Metzinger is set forth in "Item
9--Directors   and  Executive   Officers  of  the  Company."  The  following  is
biographical information about Mr. Bartoletta:

         Mr.  Bartoletta  has served as the  President and a Manager of BioAgra,
LLC  since  December  2004.  From  1980 to 1991,  Mr.  Bartoletta  served as the
President of Bart Warehousing Corp in South Kearny, New Jersey, and from 1978 to
1999, as the President of N.J. Bart Corp,  Elizabeth,  New Jersey.  From 1998 to
the present, he has served as the President of Xact Resource International, Inc.
of Boca Raton,  Florida.  In 2006, Mr. Bartoletta was appointed the President of
Justin Holdings,  Inc. of Boca Raton,  Florida.  Justin Holdings is the owner of
the other 50% equity  interest in BioAgra.  Mr.  Bartoletta is a graduate of the
Academy of Advanced Traffic.

JOINT VENTURE PARTNER

         As  described  elsewhere  in  this  report,  we own a 50%  interest  in
BioAgra.  The  remaining  50% of BioAgra is owned by Justin  Holdings,  Inc.,  a
Florida corporation.  Justin Holdings,  Inc. is a holding company that currently
has no other investments and no other substantial business activities other than
its  ownership  interest in BioAgra.  All of the  outstanding  capital  stock of
Justin  Holdings is owned by Neal  Bartoletta,  who is also the sole officer and
director of Justin  Holdings and is the manager,  president  and CEO of BioAgra.
Justin  Holdings  acquired a 50% ownership  interest in BioAgra as the result of
the  assignment  by Xact  Resources  of its  membership  interest  in BioAgra in
February 2006.

PARTICLE TECHNOLOGY

         On February 26,  1998,  we acquired the  intellectual  property  rights
related to our  particle  interconnect  technology  from  Particle  Interconnect
Corporation,  a Colorado  corporation.  We acquired the particle  technology  to
pursue a more focused,  strategic  application  and  development of the particle
technology and to  commercialize  the  technology as the  NanoPierce  Connection
System (NCSTM). NCS is an alternative method of providing temporary or permanent
electrical   connections  between  different  flexible,   rigid,   metallic  and
non-metallic surfaces.  Through the use of the particle technology,  we can also
attach  semiconductors  directly to various  surfaces.  While we do not plan, at
this time, to continue  efforts to manufacture or develop  products that utilize
our particle technology, we will pursue the licensing of our technology to third
parties.

                                      -7-
<PAGE>

         In January 2007, we signed a separate  six-month  technology  licensing
agreement  to  permit  a  different   prospective   licensee  the  non-exclusive
opportunity  to conduct a market  survey  relating to our particle  interconnect
technology that was extended in July 2007 for an additional six-month period. If
either market  survey is  favorable,  that  technology  licensing  agreement may
mature into a royalty-paying commercial license.

RESEARCH AND DEVELOPMENT

         Our research and development activities were formerly conducted through
NanoPierce Connection,  with additional activities occurring at ExypnoTech.  For
the fiscal  years  ended June 30, 2008 and 2007,  we  incurred  no research  and
development expenses.

         We  anticipate  that a substantial  amount of research and  development
activities will occur at BioAgra,  LLC. The expected  activities include testing
Agrastim(R)  and  Purestim(TM)  for quality  control and the  development of new
premixed products  containing  Agrastim(R) that will allow BioAgra to market and
sell to a  broader  range of  customers.  BioAgra  expects  to fund and build an
extensive  research  and  development  laboratory  at its main  facility and has
adequate  space at the facility to build such a  laboratory.  The  laboratory is
currently in the design stages.

         BioAgra  sponsors   independent   university   research   projects  for
Agrastim(R).  One past  research  project was an equine study  completed by Fort
Valley State  University in Fort Valley,  Georgia.  Another research project was
conducted  by  the  University  of  Georgia   relating  to  the  application  of
Agrastim(R)  in chicken feed as an  alternative to antibiotics to treat necrotic
enteritis, a deadly disease affecting poultry and turkey.

         BioAgra and Agra Nutrition,  LLC have  conducted,  in the past, and are
currently  conducting  numerous  field  trials  of  Agrastim(R)  in  all  market
applications.  These trials  provide  valuable  data relating to the benefits of
using  Agrastim(R)  in the feeds of animals.  The dairy market is of  particular
interest to BioAgra and Agra Nutrition, LLC because of the dramatic reduction on
somatic cell count in milk after application of Agrastim(R) in the feed of dairy
cattle.  A reduction in somatic cell count is directly related to an increase in
overall milk production and can contribute to longer shelf life of the milk.

COMPETITION

BIOAGRA

         Competition for beta glucan products in the markets targeted by BioAgra
is currently  limited.  The United  States and many other  countries  are in the
process  of  eliminating  or  plan to  eliminate  the  use of  growth  promotion
antibiotics in the feed of animals intended for human  consumption.  There are a
limited  number  of  alternatives   to  growth   promotion   antibiotics.   Such
alternatives  include  organic  acids,  plant  extracts such as oregano oil, and
mannoproteins.  These  alternatives have not experienced a great success rate to
date.

         Other potential  competitors to BioAgra include those companies already
producing beta glucan for human consumption. This type of "purified" beta glucan
is  considered  too  expensive  to use in markets  other  than for direct  human
consumption.  Other  competitors  are those  producing beta glucan with a 60% or
less bioactivity  level for the markets  addressed by BioAgra.  "Bioactivity" is
the ability to activate the cells of the immune system, specifically white blood
cells  that  help  to  kill  and  digest   foreign   materials  and   infectious
microorganisms.  The greater the bioactivity  level,  the greater the ability to
activate the cells of the immune  system.  Based upon data  provided to us, beta
glucan  having less than 80%  bioactivity  is not  effective  in the animal feed
markets chosen by BioAgra.  BioAgra intends to produce beta glucan with at least
80% bioactivity and intends to provide a written guarantee to its customers that
its beta glucan products will have a bioactivity level of at least 80%.

         Competition  will  also  consist  of  established  producers  of growth
promotion  antibiotic  products.  These are large  companies with vast resources
allocated to the protection of the brand  recognition  and market share of their
products.  Success will require people switching from the artificial  antibiotic
growth products to beta glucan products.

                                      -8-
<PAGE>

         We are also aware of one company, Fibona Health Products GmbH, which is
promoting yeast beta glucan products in Europe and the United Kingdom. We do not
believe its products will compete with BioAgra's beta glucan products.

INTELLECTUAL PROPERTY

BIOAGRA

PROGRESSIVE BIOACTIVES LICENSE TERMINATION AGREEMENT

         On July 11, 2007,  BioAgra,  LLC entered into a Termination  and Mutual
General Release  Agreement with  Progressive  Bioactives,  Inc. to terminate the
parties'  Technology  License  Agreement  dated  April 15, 2005 that had granted
BioAgra  the license to produce  and  process a yeast beta  glucan  product.  As
consideration  for  termination of the  Technology  License  Agreement,  BioAgra
agreed to pay to Progressive  Bioactives  2.5% of its gross sales of beta glucan
products from July 1, 2007 through June 30, 2017. Additionally,  for a period of
two years beginning on July 1, 2007,  BioAgra agreed to use its best efforts not
to  pursue  marketing  and  sales of its beta  glucan  products  in the field of
livestock, companion animal, and aquaculture in Canada, South Africa, Australia,
Chile,  and South Korea.  BioAgra also agreed to indemnify and hold  Progressive
Bioactives  harmless  from any  third-party  claim arising from any sale of beta
glucan into the human nutrition and cosmetic markets.

         The  termination  and mutual release  agreement  further  provided that
BioAgra has the right to  manufacture  beta glucan  products  utilizing  its own
intellectual property,  methods and processes,  such methods and processes being
independent  of and  separate  from any  patent or other  intellectual  property
rights of Progressive  Bioactives.  BioAgra and Progressive  Bioactives (and its
affiliates)  each  acknowledged  and agreed  that their  respective  beta glucan
technology does not infringe on the technology of the other party and agreed not
to sue each other or any agent, customer, affiliate,  representative distributor
or other person acting on behalf of such party for  infringement  of any current
or future  intellectual  property  rights  based on each  party's use of its own
methods and processes for producing beta glucan or any reasonable  modifications
thereof.

         Progressive  Bioactives and BioAgra each  unconditionally  released and
discharged  each other from any and all  claims,  defenses,  demands,  causes of
action,  liability,  damages,  costs and expenses arising from or related to the
subject matter of the license agreement,  which they have or may have up through
and  including  the date of  execution  of the  termination  and mutual  release
agreement,  whether  such  claims  were  known  or  unknown  at the  time of the
agreement.

DEVELOPMENT OF BETA GLUCAN PRODUCTS

         BioAgra has developed,  and continues to work towards new modifications
to,  its  beta  glucan  manufacturing  process.  BioAgra  may  file  for  patent
protection for its beta glucan products or may keep its processes and procedures
as a trade secret.

PARTICLE TECHNOLOGY

         We are  currently in the process of  attempting  to license our NCS(TM)
technology  to third  parties.  NCS(TM)  is a  method  where  metallized,  hard,
microscopic  particles are deposited onto one of two contact  surfaces,  through
electrolytic  or  electro-less  plating  methods or other methods.  When the two
surfaces are pressed  together,  the conductive  particles  penetrate the second
contact  surface  and create an  electrical  connection.  Bonding of the contact
surfaces can be achieved using  nonconductive  adhesives or ultrasonic  welding.
NCS provides  advantages to potential  users  including  lower costs through the
usage of less  expensive  materials,  the  elimination of  manufacturing  steps,
improved thermal and electrical properties,  elimination of special environments
for  application,  decreased  production  time, easy  integration  into existing
production lines,  increased design  miniaturization,  adaptability for specific
applications, and RF (radio frequency) performance.

                                      -9-

<PAGE>
         OTHER INTELLECTUAL PROPERTY

         We currently hold 11 patents with the U.S. Patent and Trademark Office.
To reduce  expenses,  during the fiscal  years ended June 30, 2006 and 2005,  we
abandoned several of our patent  applications.  We also hold several  trademarks
with the U.S.  Patent and Trademark  Office in connection  with our former name,
logo and services.

GOVERNMENT REGULATION

         BioAgra  has  self-certified  that all  components  of its beta  glucan
products are generally recognized as safe or GRAS according to the U.S. Food and
Drug  Administration  regulations.  A GRAS  designation  exempts the beta glucan
products from the regulations of the U.S. Department of Agriculture,  permitting
the sale of the beta  glucan  products  anywhere  in the United  States  without
obtaining a license.  Should BioAgra determine that the beta glucan products can
no longer be  recognized  as GRAS,  it will be  required to sell the beta glucan
products as food  additives by obtaining a license to sell from each  individual
state in which sales would  occur.  There is no  assurance  that BioAgra will be
able to  successfully  obtain or maintain  licenses in all states in which sales
are  expected to be made or that the cost of  obtaining  and  maintaining  these
licenses will not limit BioAgra's ability to sell the beta glucan products.

         We believe  that we are in  compliance  with all federal and state laws
and regulations  governing our limited  operations.  Further, we believe that we
are in  compliance  with all German laws and  regulations  governing our limited
operations in Germany.  Compliance with federal and state environmental laws and
regulations did not have a material effect on our capital expenditures, earnings
or competitive position during the fiscal years ended June 30, 2008 or 2007.

EMPLOYEES

         As of October 10, 2008, we and our subsidiaries  had one employee.  Mr.
Metzinger is our only executive  officer and has a signed  employment  agreement
with us.

RISK FACTORS

         IN ADDITION TO THE OTHER  INFORMATION  IN THIS  REPORT,  THE  FOLLOWING
FACTORS SHOULD BE CONSIDERED IN EVALUATING OUR BUSINESS AND FINANCIAL CONDITION.
WE BELIEVE THE RISKS AND UNCERTAINTIES DESCRIBED BELOW MAY MATERIALLY AFFECT OUR
LIQUIDITY  AND  OPERATING  RESULTS.  THERE  ALSO COULD BE  ADDITIONAL  RISKS AND
UNCERTAINTIES  THAT WE ARE  CURRENTLY  UNAWARE  OF,  OR THAT WE ARE AWARE OF BUT
CURRENTLY DO NOT CONSIDER TO BE  MATERIAL.  THESE COULD BECOME  IMPORTANT IN THE
FUTURE OR PROVE TO BE MATERIAL AND AFFECT OUR FINANCIAL  CONDITION OR RESULTS OF
OPERATIONS.

RISKS RELATING TO OUR BUSINESS AND THE BUSINESS OF OUR UNCONSOLIDATED INVESTEES

WE HAVE A HISTORY OF LOSSES

         We expect that  BioAgra's  manufacturing,  developing  and marketing of
Agrastim(R)  as a feed  additive  in the  poultry,  equine,  cattle,  swine  and
aquaculture industries and Purestim(TM) for human consumption will be expensive.
We recently have incurred  increased  operating expenses without any increase in
revenues.  We reported a net loss of $1,930,791  and  $4,460,541  for our fiscal
years ended June 30, 2008 and 2007, respectively.

WE MAY NOT BE ABLE TO CONTINUE AS A GOING CONCERN

         Our independent registered public accounting firm's audit report on our
consolidated  financial  statements as of June 30, 2008 includes an  explanatory
paragraph expressing  substantial doubt about our ability to continue as a going
concern.  As a result of the  conditions  that gave rise to this  going  concern
modification in our auditor's report on our financial statements,  we may have a
difficult time obtaining significant  additional financing.  If we are unable to
secure significant additional

                                      -10-
<PAGE>

financing,  we may be obligated to seek protection under the bankruptcy laws and
our stockholders may lose their investment.

OUR JOINT VENTURE  INVESTMENTS  COULD BE ADVERSELY  AFFECTED BY OUR LACK OF SOLE
DECISION-MAKING AUTHORITY, OUR RELIANCE ON CO-VENTURERS' FINANCIAL CONDITION AND
DISPUTES BETWEEN OUR CO-VENTURERS AND US

         Our primary  business is our 50%  interest in BioAgra.  Investments  in
joint  ventures  involve  risks that would not be present were another party not
involved, including the possibility that our co-venturer,  Justin Holdings, Inc.
with  respect  to  BioAgra,  LLC (of  which is an entity  over  which we have no
control),  might become  bankrupt,  fail to fund their share of required capital
contributions  or fail to perform their  responsibilities  under our  agreements
with them. Our  co-venturers'  and our licensees also may have economic or other
business interests or goals that are inconsistent with our business interests or
goals,  and they may be in a position to make  decisions or to take actions that
are contrary to our preferences, policies or objectives.

         We do not have sole decision making control regarding the BioAgra joint
ventures.  With respect to BioAgra, in which we have a 50% interest, we have the
potential  risk  of  impasses  on  decisions,  such  as the  business  policies,
practices and procedures relating to the production and marketing of beta glucan
products or a sale of the joint  venture,  because  neither we nor the other 50%
owner, Justin Holdings, Inc., has full control over the joint venture.  Disputes
between us and our  co-venturer  may result in  litigation or  arbitration  that
would  increase  our expenses and prevent our  officers  and/or  directors  from
focusing  their  time and  effort  exclusively  on our  business.  Consequently,
actions  by  or  disputes  with  our  co-venturer  might  result  in  subjecting
properties owned by the joint ventures to additional risk. In addition,  we may,
in certain circumstances, be liable for the actions of our co-venturer.

IF OUR PRODUCTS INFRINGE THE INTELLECTUAL  PROPERTY RIGHTS OF OTHERS, WE MAY PAY
UNEXPECTED LITIGATION COSTS OR DAMAGES FOR SELLING OUR PRODUCTS

         We intend to avoid  infringing  (and to cause entities in which we hold
equity  interests  to avoid  infringing)  the  intellectual  property  rights of
others; however, no assurances can be given that the manufacture and sale of our
products (or products of entities in which we hold an equity  interest)  may not
infringe or otherwise  violate the  intellectual  property rights of others.  If
this were to be the case, we (or the entities in which we hold equity interests)
may be subject to legal  proceedings  and  claims,  including  claims of alleged
infringement  by us (or the entities in which we hold equity  interests)  of the
patents and other  intellectual  property rights of third parties.  Intellectual
property litigation is expensive and time-consuming, regardless of the merits of
any claim.

         If it were to be found that our  products (or the products of an entity
in which  we hold an  equity  interest)  potentially  infringe  or  violate  the
intellectual  property  rights of others,  we may need to obtain  licenses  from
these parties, substantially re-engineer products in order to avoid infringement
or  renegotiate  existing  licenses  to avoid  future  infringement.  We (or the
applicable  entity  in which we hold an  equity  interest)  might not be able to
obtain the  necessary  licenses on  acceptable  terms,  or at all, or be able to
re-engineer products successfully. Moreover, if we are (or an entity in which we
hold an equity interest is) sued for infringement and lose the suit, we (or such
entity)  could be required to pay  substantial  damages  and/or be enjoined from
using or selling the infringing products. Any of the foregoing could cause us to
incur  significant  costs and  prevent  us (or such  entity)  from  selling  the
products subject to any legal action.

         BioAgra entered into a Termination and Mutual General Release Agreement
with Progressive Bioactives.  Pursuant to the termination agreement, BioAgra and
Progressive  Bioactives  agreed  not to sue each other for  infringement  of any
current or future intellectual  property rights based on each party's use of its
own methods and  processes  or any  reasonable  modifications  thereof,  for the
development and manufacture of beta glucan products.  However, we can provide no
assurance that Progressive  Bioactives will not allege that BioAgra has violated
its  intellectual  property  rights  through the production and sale of the beta
glucan  product,   which  could  result  in  substantial   monetary  damages  or
injunctions prohibiting the production of the beta glucan products.

                                      -11-
<PAGE>

IF  BIOAGRA'S  BETA  GLUCAN  PRODUCTS  DO  NOT  SATISFY   CERTAIN   GOVERNMENTAL
REGULATIONS,  BIOAGRA  MAY BE  UNABLE TO OBTAIN  REGULATORY  APPROVAL  OR MAY BE
REQUIRED TO OBTAIN MULTIPLE LICENSES TO SELL OUR BETA GLUCAN PRODUCTS

         BioAgra  has  self-certified  that all  components  of its beta  glucan
products are generally recognized as safe or GRAS according to the U.S. Food and
Drug  Administration  regulations.  A GRAS  designation  exempts the beta glucan
products from the regulations of the U.S. Department of Agriculture,  permitting
the sale of the beta  glucan  products  anywhere  in the United  States  without
obtaining  a  license.   Should  the  beta  glucan   products  lose  their  GRAS
designation,  BioAgra will be required to sell the beta glucan  products as feed
additives  by  obtaining a license to sell from each  individual  state in which
sales  would  occur.  There  is no  assurance  that  BioAgra  would  be  able to
successfully  obtain or  maintain  licenses  in all  states  in which  sales are
expected to be made or that the cost of obtaining and maintaining these licenses
would not limit its ability to sell the beta glucan products.

OPERATIONS OF BIOAGRA MAY BE DELAYED OR COST MORE THAN WE ANTICIPATE

         Operations at the beta glucan  production  plant  commenced in March of
2006.  BioAgra produced  approximately  7,600 kilograms of finished product,  of
which 5,600 kilograms remains in inventory,  and has halted  production  pending
the  sale  of at  least  50% of  the  existing  inventory.  Once  production  is
recommenced,  there can be no assurances that there will not be future delays in
operations or that the average cost to operate the plant will not be higher than
anticipated.

WE CANNOT  GUARANTEE  THE  QUALITY,  PERFORMANCE  OR  RELIABILITY  OF  BIOAGRA'S
PRODUCTS

         Except  as  described  in the  prior  risk  factor,  we have  no  prior
experience  manufacturing  or  producing  beta  glucan  products  or  any  other
products. We are relying upon the skill and experience of BioAgra's managers and
our co-joint venturer to timely and cost effectively manufacture the beta glucan
product. We expect that BioAgra's customers will demand quality, performance and
reliability.  We cannot assure you that we or our co-joint venturer will be able
to meet the  quality  control  standards  that  may be  established  by  various
industries for feed additives. BioAgra intends to provide a written guarantee or
other  assurance  to its  customers  that its beta glucan  products  will have a
bioactivity level of at least 80%.  "Bioactivity" is the ability to activate the
cells of the immune system, specifically white blood cells that help to kill and
digest  foreign  materials  and  infectious  microorganisms.   The  greater  the
bioactivity  level,  the greater the ability to activate the cells of the immune
system.  However,  BioAgra cannot  guarantee that all batches of the beta glucan
products  produced for inclusion in various  animal feed products will meet that
bioactivity  level.  Should BioAgra be unable to meet the standard,  it may lose
existing customers and be unable to acquire new customers.

THERE MAY BE INSUFFICIENT DEMAND FOR BIOAGRA'S BETA GLUCAN PRODUCTS

         Sales of the beta glucan products have been limited to date. The market
acceptance of new products and technologies, including the beta glucan products,
is subject to a number of factors,  including the ability of the product to more
effectively  and  efficiently  meet  potential  customers'  needs  than  current
products.  Antibiotics and growth hormone  supplements are widely used in animal
feed.  BioAgra must convince  potential  customers that  Agrastim(R) is safe and
effective  as a feed  additive  and can be  manufactured  efficiently  and  cost
effectively  before animal  producers  will be willing to use the product rather
than existing  products such as antibiotics and growth hormone  supplements.  In
addition,  BioAgra must convince  potential  customers that Purestim(TM) is safe
for human  consumption.  To create this  consumer  demand,  BioAgra will have to
successfully  market  and  sell  its  products.   BioAgra  has  been  conducting
independent  research studies and field trials as part of its overall  marketing
efforts,  which has delayed market  acceptance of Agrastim(R) and  Purestim(TM).
While results in such research studies and field trials have been favorable, the
beta glucan  products  may not be viewed by  consumers  as an  improvement  over
existing products and may not achieve commercial acceptance.


                                      -12-
<PAGE>

WE MAY BE UNABLE TO MEET OUR ONGOING NEEDS FOR ADDITIONAL CAPITAL

         We cannot accurately predict how much funding we will need to implement
our  strategic  business  plan or to  continue  operations.  Our future  capital
requirements,  the  likelihood  that we can  obtain  money  and the terms of any
financing will be influenced by many different factors, including:

         O        our revenues and the revenues of our joint ventures;

         O        the status of competing products in the marketplace;

         O        our performance in the marketplace;

         O        our overall financial condition;

         O        our business prospects;

         O        the  perception  of  our  growth   potential  by  the  public,
                  including potential lenders;

         O        our  ability  to  enter  into  joint   venture  or   licensing
                  relationships to achieve a market presence; and

         O        our  progress in  developing,  marketing  and selling the beta
                  glucan products.

If we cannot obtain  adequate  financing or if the terms on which we are able to
acquire financing are unfavorable, our business and financial condition could be
negatively  affected.  We may have to delay, scale back or eliminate some or all
of our  development  and marketing  programs,  if any. We may also have to go to
third parties to seek financing and, in exchange,  we may have to give up rights
to some of our technologies, patents, patent applications, potential products or
other assets.

         In addition,  the United States is experiencing  severe  instability in
the  commercial and  investment  banking  systems which is likely to continue to
have  far-reaching  effects  on the  economic  activity  in the  country  for an
indeterminable period. The long-term impact on the United States economy and the
Company's operating  activities and ability to raise capital cannot be predicted
at this time, but may be substantial.

WE MAY BE UNABLE TO HIRE AND RETAIN KEY PERSONNEL

         Our  future  success  depends  on  our  ability  to  attract  qualified
personnel.  We may be unable to attract or retain these necessary personnel.  If
we fail to attract or retain skilled employees,  or if our key employee fails to
perform in his current position, we may be unable to assist in bringing the beta
glucan products to the marketplace and to generate sufficient revenues to offset
operating costs.

BIOAGRA MAY BE UNABLE TO HIRE AND RETAIN INDEPENDENT DISTRIBUTORS

         BioAgra's  future success  depends on its ability to attract  qualified
independent  distributors  for the beta  glucan  products.  It may be  unable to
attract or retain these independent distributors. If BioAgra fails to attract or
retain independent  distributors,  or if its existing  independent  distributors
fail to find end  users  for the  beta  glucan  products,  it may be  unable  to
successfully  bring the beta glucan  products to the marketplace and to generate
sufficient revenues to offset operating costs.

WE MAY BE  UNABLE  TO  OBTAIN  AND  RETAIN  APPROPRIATE  PATENT,  COPYRIGHT  AND
TRADEMARK PROTECTION OF OUR PRODUCTS OR MANUFACTURING PROCESS

         We  protect  our   intellectual   property   rights  through   patents,
trademarks, trade names, trade secrets and a variety of other measures. However,
these measures may be inadequate to protect our  intellectual  property or other
proprietary  information.  Should we encounter any of the following  issues with
our  intellectual  property,  our  business  and  financial  condition  could be
negatively affected.

                                      -13-
<PAGE>

         O        TRADE  SECRETS MAY BECOME  KNOWN BY THIRD  PARTIES.  Our trade
                  secrets or  proprietary  information  may  become  known or be
                  independently developed by competitors.

         O        RIGHTS  TO  PATENTS  AND  TRADE  SECRETS  MAY BE  INVALIDATED.
                  Disputes may arise with third  parties  over the  ownership of
                  our  intellectual   property   rights.   Our  patents  may  be
                  invalidated,   circumvented  or  challenged,  and  the  rights
                  granted under those patents that provide us with a competitive
                  advantage may be nullified.

         O        PROBLEMS  WITH  FUTURE  PATENT  APPLICATIONS.  Our  pending or
                  future patent  applications may not be approved,  or the scope
                  of the granted patent may be less than the coverage sought.

         O        THIRD PARTIES MAY DEVELOP  SIMILAR  PRODUCTS OR  MANUFACTURING
                  PROCESS.  Competitors may develop similar products,  duplicate
                  our  products or may design  around the patents that are owned
                  by  us.  Competitors  may  develop  a  similar   manufacturing
                  process,  duplicate  our  manufacturing  process or may design
                  around any  patents  that are owned by us in  relation  to the
                  manufacturing process.

         O        LAWS   IN   OTHER   COUNTRIES   MAY   INSUFFICIENTLY   PROTECT
                  INTELLECTUAL  PROPERTY  RIGHTS  ABROAD.  Foreign  intellectual
                  property  laws may not  adequately  protect  our  intellectual
                  property  rights  abroad.  Our failure to protect these rights
                  could adversely affect our business and financial condition.

         O        LITIGATION  MAY BE REQUIRED TO PROTECT  INTELLECTUAL  PROPERTY
                  RIGHTS.   Litigation   may  be   necessary   to  protect   our
                  intellectual  property rights and trade secrets,  to determine
                  the validity of and scope of the rights of third parties or to
                  defend against claims of  infringement  or invalidity by third
                  parties. This litigation could be expensive,  divert resources
                  and  management's  time from our sales and marketing  efforts,
                  and could have a materially  adverse  effect on our  business,
                  financial  condition  and  results  of  operations  and on our
                  ability to enter  into joint  ventures  or  partnerships  with
                  others.

ECONOMIC  FACTORS OUTSIDE OUR CONTROL MAY HAVE AN ADVERSE EFFECT ON OUR REVENUES
AND INCOME

         BioAgra's  income may be impacted by economic  factors  that are beyond
its control such as  fluctuations  in the price of animal feed and human dietary
supplements,  outbreaks of diseases in animals,  and demand for products related
to  cattle,   dairy,   poultry,   equine,   swine,  aquatic  animals  and  human
neutraceuticals and dietary supplements. Rising animal feed prices and increases
in  production  costs for  livestock  producers may cause a reduction in overall
production,  which,  in turn,  could adversely  impact  BioAgra's  revenues.  An
outbreak of disease, such as avian influenza or mad cow disease, could result in
increased  government  regulation of the livestock  industry,  a serious drop in
demand for livestock products,  and adverse publicity  materially  affecting the
animal producers for a significant  period of time, which could adversely impact
BioAgra's business,  revenues,  prospects,  financial condition,  and results of
operation.

         In addition,  the United States is experiencing  severe  instability in
the  commercial and  investment  banking  systems which is likely to continue to
have  far-reaching  effects  on the  economic  activity  in the  country  for an
indeterminable  period.  The long-term  impact on the United States  economy and
BioAgra's business,  revenues,  financial  condition,  and results of operations
cannot be predicted at this time, but may be substantial.


THE MARKET FOR FEED ADDITIVES IS COMPETITIVE

         The feed  additive  market is  competitive.  BioAgra  will compete with
producers  of  growth  promotion  antibiotic  products,  many of which are large
companies with vast resources  allocated to the protection of brand  recognition
and market share of their  products.  BioAgra may also  compete  with  companies
producing beta glucan for other  purposes,  and companies that produce  existing
alternatives to growth  promotion  antibiotic  products,  such as organic acids,
plant  extracts,  and  mannoproteins.  BioAgra  has a  competitive  disadvantage
against many of these competitors in several different areas, including:

        O         financial resources;

        O         manufacturing capabilities;

                                      -14-
<PAGE>

        O         diversity of revenue sources and business opportunities;

        O         personnel and human resources; and

        O         research and development capabilities.

Larger  companies  have  long-term  advantages  over BioAgra in research and new
product  development and have a greater ability to withstand  periodic downturns
in the feed  additive  market  because they have diverse  product lines that can
provide revenue even when there is a downturn in the feed additive market.

IF BIOAGRA BECOMES UNABLE TO USE ITS MANUFACTURING FACILITY, IT MAY BE UNABLE TO
MANUFACTURE ITS BETA GLUCAN PRODUCTS FOR AN EXTENDED PERIOD OF TIME

         BioAgra  manufactures at a single location in Georgia,  which currently
runs a single production line.  Manufacturing products at a single site presents
risks  because  a  disaster,  such  as  a  fire  or  hurricane,   may  interrupt
manufacturing  capability.  In such an  event,  BioAgra  will  have to resort to
alternative  sources of  manufacturing  that could  increase  costs,  as well as
result in significant delays. Any increase in costs of manufacturing,  slowdowns
or  shutdowns  by BioAgra  could have a  material  adverse  affect on our future
business, financial condition and results of operations.

BIOAGRA'S  USE OF A SINGLE  MANUFACTURING  FACILITY  MAY RESTRICT ITS ABILITY TO
ATTRACT CUSTOMERS

         BioAgra will  fulfill the needs of varied  livestock  producers,  human
dietary  supplement  producers  and  horse  owners  based on the use of a single
manufacturing  plant  and a  single  production  line.  BioAgra's  manufacturing
limitations  may restrict  its ability to attract  large  customers  who require
certainty in the production  process.  If BioAgra is successful,  it anticipates
expanding  manufacturing  operations.  However,  while our  production  area has
enough space for three  separate  production  lines,  there is no assurance that
BioAgra  will have the  financial  resources  required to expand its  production
facilities beyond the single  production line currently  existing at the Georgia
manufacturing facility.

MANUFACTURING  CAPACITY  RESTRAINTS  AND LIMITED  EXPERIENCE MAY HAVE AN ADVERSE
AFFECT ON BIOAGRA

         BioAgra has limited manufacturing capacity and experience.  BioAgra may
encounter some difficulties, such as significant unexpected costs and delays, in
scaling  up the  manufacturing  operations  of  BioAgra  to  produce  quantities
required  for it to achieve  profitability.  The failure to  scale-up  BioAgra's
manufacturing  operations  in a timely and  cost-effective  manner may adversely
affect our income. We believe that we have adequate capacity to meet anticipated
demand for 2007.  However,  in the event the demand for the beta glucan products
rapidly  increases  or  spikes  in a certain  period,  BioAgra  may not have the
manufacturing ability to fulfill demand, either in its own facilities or through
agreements with third parties.  A potential lack of  manufacturing  capacity may
materially affect BioAgra's and our reputation,  prospects,  revenue, income and
results of operation.

AN INCREASE IN THE COST OR A DISRUPTION IN THE FLOW OF BIOAGRA'S  IMPORTED YEAST
PRODUCT MAY DECREASE ITS SALES AND PROFITS

         BioAgra obtains its entire supply of spent yeast product, which is used
to  manufacture  the beta  glucan  products,  from a Brazilian  supplier.  Risks
associated  with BioAgra's use of imported  spent yeast include:  disruptions in
the flow of  imported  goods  because  of  factors  such as  electricity  or raw
material shortages, work stoppages,  strikes and political unrest; problems with
oceanic shipping,  including shipping container  shortages;  economic crises and
international disputes;  increases in the cost of purchasing or shipping foreign
merchandise  resulting from the failure to maintain  normal trade relations with
source  countries;  adverse  fluctuations in currency exchange rates; and import
duties,  import quotas, trade embargoes and other trade sanctions.  A disruption

                                      -15-
<PAGE>

in the flow of spent  yeast from the  Brazilian  supplier  or an increase in the
cost of the spent yeast may limit or decrease BioAgra's sales and profits.

REPLACING  BIOAGRA'S  SOLE SUPPLIER OF KEY MATERIALS  COULD RESULT IN UNEXPECTED
DELAYS AND EXPENSES

         BioAgra obtains key materials and services for the beta glucan products
from  sole  source  suppliers,  primarily  with  respect  to spent  brewer's  or
distillery yeast.  Specifically,  BioAgra obtains its spent yeast product from a
sole source in Brazil.  Should the  Brazilian  supplier  become unable to supply
BioAgra  with the spent  yeast  product,  BioAgra  will be  forced  to  purchase
substitute  products.   All  of  these  materials  are  commercially   available
elsewhere.  However,  if  BioAgra  is  required  to locate a new  supplier,  the
substitute or replacement  materials may need to be tested for equivalency.  The
process of locating a new supplier and any testing of  materials,  if necessary,
may  cause a delay in  production  of the beta  glucan  products  and may  cause
BioAgra to incur additional expense.

RISKS RELATING TO THE OWNERSHIP OF OUR EQUITY SECURITIES

WE HAVE A SINGLE CONTROLLING SHAREHOLDER,  WHO HAS THE POWER TO ELECT A MAJORITY
OF OUR BOARD OF DIRECTORS AND CONTROL OUR STRATEGIC DIRECTION

         As of October 10, 2008, Arizcan Properties Ltd. owned approximately 26%
of our  outstanding  common  stock  assuming  all  securities  held  by  Arizcan
Properties  and  other  holders  that  are  convertible  into  common  stock  or
exercisable  for common stock were  converted or  exercised.  In addition,  as a
result of our March 2007  private  placement  transaction,  we issued to Arizcan
Properties warrants and shares of series A nonconvertible  preferred stock. As a
result,  Arizcan Properties acquired approximately 51% of our voting power, and,
on a fully diluted basis, Arizcan Properties would hold approximately 80% of our
voting power if they exercise the warrant.  These shares give Arizcan Properties
Ltd. the power to elect a majority of our board of directors  and,  through that
board control,  control our  operations.  The ability of other  shareholders  to
influence  our  direction  (for  example,  through the election of directors) is
therefore limited or not available.

SALES OF COMMON STOCK BY OUR  CONTROLLING  SHAREHOLDER MAY RESULT IN A CHANGE OF
CONTROL

         As of October 10, 2008,  Arizcan  Properties,  Ltd. is our  controlling
shareholder.  Arizcan Properties,  Ltd. may cause us to have a change of control
if they  sell  enough  of our  common  stock.  We are not  aware of any  present
intention  of Arizcan  Properties,  Ltd. to cause us to have a change of control
and we are not aware of any other  arrangements  that may  result in a change of
control.

WE HAVE A  THINLY-TRADED  STOCK AND  PUBLIC  SALE OF  SHARES BY OUR  CONTROLLING
SHAREHOLDER COULD CAUSE THE MARKET PRICE OF OUR SHARES TO DROP SIGNIFICANTLY

         As of October 10, 2008, Arizcan  Properties,  Ltd. owned  approximately
26% of our  outstanding  common stock  assuming all  securities  held by Arizcan
Properties,  Ltd. and other  holders that are  convertible  into common stock or
exercisable for common stock were converted or exercised. If Arizcan Properties,
Ltd. were to begin selling shares in the market rather than holding all of those
shares over a longer term, the added available  supply of shares could cause the
market price of our shares to drop. Furthermore, in light of the large number of
shares that it holds and its generally lower  acquisition  cost of those shares,
Arizcan  Properties,  Ltd.  could be willing to sell it shares at a price  lower
than the currently-prevailing market price, thereby depressing that price.

THE SALE OF SECURITIES BY CURRENT  STOCKHOLDERS COULD CAUSE DILUTION OF EXISTING
HOLDERS OF OUR COMMON STOCK BY DECREASING THE PRICE OF OUR COMMON STOCK

         The market  price of our common  stock could be  adversely  affected by
sales of substantial  amounts of common stock in the public market,  by investor
perception that substantial amounts of common stock could be sold or by the fact
or  perception  of other events that could have a dilutive  effect on the market
for our common stock.  As of October 10, 2008, we had  45,013,178  shares of our
common stock  outstanding.  If all of our outstanding  options and warrants were
exercised and all of our reserved  shares of common stock were issued,  we could

                                      -16-
<PAGE>

have up to 54,600,312 shares of common stock  outstanding.  Future  transactions
with other investors could further depress the price of our common stock because
of additional dilution.

THE PRICE OF OUR COMMON STOCK COULD BE AFFECTED BY THE ABILITY OF HOLDERS OF OUR
COMMON STOCK TO SELL THEIR STOCK

         The market price of our common stock will be  influenced by the ability
of  common   stockholders   to  sell  their  stock.  As  of  October  10,  2008,
approximately 22,064,326 shares of our common stock were freely transferable and
constitute the "float" in the public market for our common stock.  If all of our
outstanding  options and warrants were exercised and all of our reserved  shares
were  issued,  the  "float" for our common  stock  could  increase to a total of
54,600,312  shares. As of October 10, 2008,  approximately  22,948,852 shares of
our common stock were "restricted" or "control" securities within the meaning of
Rule 144 under the Securities Act of 1933. These restricted securities cannot be
sold unless they are  registered  under the Securities Act of 1933, or unless an
exemption from registration is otherwise available, including the exemption that
is contained in Rule 144. If all of our  outstanding  options and warrants  were
exercised and all of our reserved shares were issued, the number of "restricted"
or "control"  shares of our common stock could  increase to a total of 8,754,844
shares.

WE COULD ISSUE  PREFERRED  STOCK THAT COULD  ADVERSELY  AFFECT THE RIGHTS OF OUR
COMMON STOCKHOLDERS

         We are authorized to issue up to 5,000,000  shares of preferred  stock,
$.0001 par value per share.  Our  articles  of  incorporation  give our board of
directors  the  authority to issue  preferred  stock without the approval of our
common stockholders.  We may issue preferred stock to finance our operations. We
may  authorize  the issuance of our  preferred  stock in one or more series.  In
addition, we may set several of the terms of the preferred stock, including:

         O        dividend and liquidation preferences;

         O        voting rights;

         O        conversion privileges;

         O        redemption terms; and

         O        other  privileges and rights of the shares of each  authorized
                  series.

The issuance of large blocks of preferred  stock could have a dilutive effect on
our existing stockholders and could negatively impact our existing stockholders'
liquidation  preferences.  In addition,  while we include preferred stock in our
capitalization to improve our financial flexibility, we could possibly issue our
preferred  stock to third  parties  as a method  of  discouraging,  delaying  or
preventing a change in control in our present management.

THE RESALE OF OUR COMMON  STOCK BY YOU MAY BE LIMITED  BECAUSE OF ITS LOW PRICE,
WHICH COULD MAKE IT MORE DIFFICULT FOR BROKER/DEALERS TO SELL OUR COMMON STOCK

         The  Securities  Enforcement  and Penny  Stock  Reform Act of 1990,  as
amended,  requires additional disclosure relating to the market for penny stocks
in  connection  with trades in any stock  defined as a penny stock.  Regulations
enacted by the SEC generally define a penny stock as an equity security that has
a market price of less than $5.00 per share, subject to some exceptions.  Unless
an exception  applies, a disclosure  schedule  explaining the penny stock market
and the risks associated with investing in penny stocks must be delivered before
any transaction in penny stock can occur.

         Our common stock is not a reported security and is currently subject to
the Securities and Exchange  Commission's "penny stock" rules. It is anticipated
that trading in our common stock will  continue to be subject to the penny stock
rules for the foreseeable future.

                                      -17-
<PAGE>

         Until such time as our common  stock  meets an  exception  to the penny
stock  regulations  cited above,  trading in our  securities  is covered by Rule
15g-2 and Rule 15g-9  promulgated  under the  Securities  Exchange  Act of 1934.
Under Rule 15g-2,  before a broker/dealer can consummate a trade in penny stock,
the  broker/dealer  must  send  an  additional  disclosure,  receive  a  written
acknowledgement  of such disclosure  from the purchaser of the penny stock,  and
wait two business days from the date the additional  disclosure was sent.  Under
Rule 15g-9,  broker/dealers  who  recommend  penny stocks to persons who are not
established  customers or accredited investors must make a special determination
in writing for the  purchaser  that the  investment  is suitable,  and must also
obtain the purchaser's written agreement to a transaction before the sale.

         The penny stock  regulations  could limit the ability of broker/dealers
to sell our securities and, thus, the ability of purchasers of our securities to
sell their  securities in the  secondary  market for so long as our common stock
has a market price of less than $5.00 per share.

WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE

         We have never paid cash dividends on our common stock. We do not expect
to pay cash dividends on our common stock at any time in the foreseeable future.
The future  payment of  dividends  directly  depends  upon our future  earnings,
capital requirements, financial requirements and other factors that our board of
directors will consider. Since we do not anticipate paying cash dividends on our
common  stock,  return on your  investment,  if any,  will  depend  solely on an
increase, if any, in the market value of our common stock.

ITEM 2. DESCRIPTION OF PROPERTY

         Our corporate  headquarters are located at 370 17th Street, Suite 3640,
Denver,  Colorado 80202. We moved into our current office space on June 27, 2001
and had a five-year lease on the property,  which expired September 2006 and was
extended  for a  five-year  term  expiring  December  2011.  The  base  rent  is
approximately  $3,110  per month for the first year of the  lease,  with  annual
increases of approximately $100 per month for each successive year of the lease,
plus certain occupancy costs.


ITEM 3. LEGAL PROCEEDINGS

HARVEST COURT LITIGATION

FINANCING AGREEMENT SUIT:

         The  Company  is a  plaintiff  and  counter-claim  defendant  in a suit
pending in the United  States  District  Court for the Southern  District of New
York (the  "District  Court").  In this  suit,  the  Company  filed  claims  for
securities  fraud,   common-law  fraud,  and  breach  of  contract  against  the
defendants.   One  defendant,   Harvest  Court,  LLC  ("Harvest   Court"),   has
counterclaimed for alleged violations of the federal securities laws. In January
2008 the Court  granted  summary  judgment  against  the  Company  on all of its
claims, which the Company intends to appeal when the judgment becomes final. The
Court also  dismissed  certain  counterclaims  against the Company.  The Company
intends  to  vigorously  defend  itself  against  the  remaining  claims.  In  a
disclosure  statement filed by Harvest Court, it set forth a damage  computation
of approximately $4.1 million,  as well as other categories of damages,  such as
out-of-pocket, statutory, punitive, and other for unspecified amounts.

         Harvest  Court has also sued the  Company in New York state  court (the
"State  Court") for breach of contract  relating to its failure to issue certain
shares of stock allegedly due under a pre-2007 financing agreement.  The Company
has  counterclaimed in this case for fraud. The State Court issued an injunction
requiring the company to reserve and set aside a certain amount of stock,  which
the  Company has done.  The  Company  intends to  vigorously  defend  itself and
prosecute its counterclaims.

                                      -18-
<PAGE>

         If  management  believes  that a loss  arising  from  these  matters is
probable and can reasonably be estimated,  the Company records the amount of the
loss,  or the minimum  estimated  liability  when the loss is estimated  using a
range,  and no  point  within  the  range  is more  probable  than  another.  As
additional  information  becomes available,  any potential  liability related to
these matters is assessed and the estimates are revised, if necessary.  Based on
currently available  information,  management believes that the ultimate outcome
of these matters,  individually  and in the aggregate,  will not have a material
adverse effect on the Company's  financial position or overall trends in results
of operations. However, litigation is subject to inherent uncertainties,  and an
unfavorable  ruling could result in a material  adverse  impact on the financial
position  and  results  of  operations  of the  period in which the  outcome  is
determined.

DEPOSITORY TRUST LAWSUIT

         In May 2004,  we filed suit against the  Depository  Trust and Clearing
Corporation  ("DTCC"),  The Depository Trust Company  ("DTC"),  and the National
Securities Clearing  Corporation  ("NSCC") in the Second Judicial District Court
of the County of Washoe, State of Nevada. The suit alleges multiple claims under
the Nevada Revised  Statutes  90.570,  90.580,  90.660 and 598A.060 and on other
legal bases. The complaint alleges,  among other things,  that the DTCC, DTC and
NSCC acted in concert to operate the "Stock Borrow Program,"  originally created
to address  short term  delivery  failures by sellers of securities in the stock
market. According to the complaint, the DTCC, NSCC and DTC conspired to maintain
significant  open fail  deliver  positions  of  millions of shares of our common
stock for extended  periods of time by using the Stock  Borrow  Program to cover
these open and  unsettled  positions.  We were seeking  damages in the amount of
$25,000,000  and  treble  damages.   Responsive  pleadings  were  filed  by  the
defendants. In April 2005, the court granted a motion to dismiss the lawsuit. We
filed an appeal to the  Supreme  Court of the  State of Nevada to  overturn  the
motion to dismiss the lawsuit.  Oral argument on the appeal was presented before
the Nevada State Supreme Court in February  2007. In September  2007, the Nevada
Supreme  Court  ruled that all of our claims were  preempted  by federal law and
affirmed the district court's dismissal of our complaint.  We subsequently filed
a Petition For Writ of Certiorari with the U.S.  Supreme Court. The Petition was
denied before the end of the term in June 2008.

OTHER LITIGATION

         On September 15, 2008,  the Company filed  collection  and  foreclosure
proceedings  against  BioAgra in the City and County Court of Denver,  Colorado.
The collection and foreclosure proceedings are directly related to principal and
accrued  interest  of  approximately  $4 million  in loans  advanced to BioAgra,
including the $3,963,982  loaned through a series of secured  promissory  notes,
and an  additional  $37,788 for open  advances not  represented  by a promissory
note.

         Upon the successful  conclusion of the litigation,  the Company intends
to be the sole  holder  of the  assets of  BioAgra  and  plans to  continue  the
operations of BioAgra,  and the manufacturing and the marketing of the AgraStrim
product.

         Other  than the  above  mentioned  lawsuits,  to the  knowledge  of our
management, there are no material legal proceedings pending or threatened (other
than  routine  litigation  incidental  to business) to which we (or any officer,
director,  affiliate  of  beneficial  owner  of  more  than  5%  of  our  voting
securities) are party, or to which our property is subject.

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

         There were no matters  submitted to security  holders during the fourth
quarter of the fiscal year covered by this report.


                                      -19-


<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF EQUITY SECURITIES

         Our common stock is presently quoted on the  over-the-counter  bulletin
board maintained by the Financial Industry Regulatory  Authority (formerly known
as the National  Association of Securities  Dealers)  ("FINRA") under the symbol
"VYTC.OB."  Our common  stock is also traded on the Berlin Stock  Exchange,  the
Frankfurt Stock Exchange, the Munich Stock Exchange and the Xetra Stock Exchange
under the symbols indicated in the table below:

           FOREIGN EXCHANGE                 TRADING SYMBOL
        ------------------------            --------------
        Berlin Stock Exchange                   NPI1.BE
        Frankfurt Stock Exchange                NPI1.F
        Munich Stock Exchange                   NPI1.MU
        Xetra Stock Exchange                    NPI1.DE

         The following table sets forth the range of high and low quotations for
our common stock on the over-the-counter  bulletin board for each full quarterly
period during the fiscal year or equivalent period for the fiscal periods ending
on the dates  indicated  below after giving effect to the reverse stock split of
our common stock that  occurred on January 31, 2006 that is described  elsewhere
in this report. The quotations were obtained from information published by FINRA
and reflect interdealer prices,  without retail mark-up,  markdown or commission
and may not represent actual transactions.



           2008 FISCAL YEAR                   HIGH           LOW
           ----------------                   ----           ---
September 30, 2007                        $   0.42      $   0.428
December 31, 2007                             0.23          0.165
March 31, 2008                                0.24          0.20
June 30, 2008                                 0.17          0.17

           2007 FISCAL YEAR
           ----------------
September 30, 2006                        $   0.49      $   0.41
December 31, 2006                             0.41          0.41
March 31, 2007                                0.32          0.32
June 30, 2007                                 0.42          0.35


         As of June 30, 2008, there were  approximately 557 holders of record of
our common stock.

DIVIDENDS

         Our board of directors determines any payment of dividends. We have not
paid  any  cash  dividends  on  our  common  stock  in the  past,  and we do not
anticipate paying any dividends in the foreseeable future. Earnings, if any, are
expected to be retained to fund our future operations. There can be no assurance
that we will pay dividends at any time in the future.

                                      -20-
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES

         We made the following  unregistered  sales of its securities from April
1, 2008 through June 30, 2008.

<TABLE>
<CAPTION>

     DATE OF SALE          TITLE OF SECURITIES      NO. OF SHARES        CONSIDERATION        CLASS OF PURCHASER
------------------------ ------------------------ ------------------ ---------------------- ------------------------
<S>                      <C>                      <C>                <C>                    <C>
   7/1/07 - 6/30/08           Common Stock                6,168,333               $930,125  Controlling Shareholder
</TABLE>

EXEMPTION FROM REGISTRATION CLAIMED

         All of the  sales by us of our  unregistered  securities  were  made in
reliance upon Section 4(2) of the  Securities Act of 1933, as amended (the "1933
Act"). The entity listed above that purchased the unregistered securities was an
existing  shareholder,  known  to us and our  management,  through  pre-existing
business  relationships,  as a long standing business associate.  The entity was
provided  access  to all  material  information,  which  it  requested,  and all
information  necessary to verify such information and was afforded access to our
management in connection with the purchases.  The purchaser of the  unregistered
securities  acquired such  securities  for investment and not with a view toward
distribution,  acknowledging  such intent to us. All  certificates or agreements
representing  such securities that were issued  contained  restrictive  legends,
prohibiting further transfer of the certificates or agreements representing such
securities,  without such securities  either being first registered or otherwise
exempt from registration in any further resale or disposition.

PURCHASES  OF EQUITY  SECURITIES  BY THE SMALL  BUSINESS  ISSUER AND  AFFILIATED
PURCHASERS

         Not applicable.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         This Annual Report on Form 10-KSB includes "forward-looking statements"
within the meaning of Section 21E of the  Securities  Exchange  Act of 1934,  as
amended.  We base these forward looking  statements on our current  expectations
and  projections  about future  events.  These forward  looking  statements  are
subject to risks, uncertainties, and assumptions about us, including:

         O        the operations and potential  profitability of BioAgra, LLC, a
                  company in which we have a 50% interest;

         O        the rate of  market  development  and  acceptance  of our beta
                  glucan products in the animal and aquatic animal feed industry
                  within which we are concentrating our business activities;

         O        the rate of  market  development  and  acceptance  of our beta
                  glucan products for human consumption;

         O        our  ability to compete  successfully  with  growth  promotion
                  antibiotic   manufacturers   and  other   providers   of  feed
                  additives;

         O        the  operations  and potential  profitability  of  ExypnoTech,
                  Gmbh,  a  company  in  which  we have a 49%  interest  that is
                  manufacturing  and  developing  inlay  components  used in the
                  manufacturing  of  radio  frequency   identification   devices
                  ("RFID"), such as smart labels, smart cards and smart tags;

                                      -21-
<PAGE>

         O        the  limited   revenues  and  significant   operating   losses
                  generated by us to date;

         O        the possibility of significant  ongoing  capital  requirements
                  and our ability to secure financing as and when necessary;

         O        our ability to retain the services of our key management,  and
                  to attract new members to the management team; and

         O        our ability to obtain and retain appropriate patent, copyright
                  and trademark  protection for our intellectual  properties and
                  any of our products.

         These  forward-looking  statements  include  statements  regarding  our
expectations,  beliefs,  or  intentions  about  the  future,  and are  based  on
information  available to us at this time. We assume no obligation to update any
of these statements and specifically decline any obligation to update or correct
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or  unanticipated
events.  Actual events and results could differ materially from our expectations
as a result of many factors,  including  those  identified in the section titled
"Item 1. Business--Risk  Factors" and other sections of this report. We urge you
to review and consider those factors,  and those identified from time to time in
our  reports  and filings  with the  Securities  and  Exchange  Commission,  for
information  about risks and  uncertainties  that may affect our future results.
All  forward-looking  statements  we make after the date of this filing are also
qualified by this cautionary statement and identified risks.

         Our   registered   public   accounting   firm's  audit  report  on  our
consolidated financial statements as of June 30, 2008, and for each of the years
in the  two-year  period  then  ended,  includes a "going  concern"  explanatory
paragraph  that describes  substantial  doubt about our ability to continue as a
going  concern.  Management's  plans in  regard  to the  factors  prompting  the
explanatory  paragraph  are  discussed  below and also in Note 2 to Notes to the
Consolidated Financial Statements included in this report.

PLAN OF OPERATIONS

         At June  30,  2008,  we had  cash on hand of  $54,550,  which we do not
believe is  sufficient to fund our  operations  for the next twelve  months.  We
intend to use our cash funds to  continue  to support  operations.  We intend to
continue to develop the business  opportunity  presented by our investment in an
unconsolidated investee, BioAgra and the Agrastim(R) product. The development of
the  business  opportunity  includes  continued  marketing  efforts  and product
testing over the next twelve months.

         In the  continuance  of our  business  operations,  we do not intend to
purchase  or sell any  significant  assets  and we do not  expect a  significant
change in the number of employees.

         We are dependent on raising additional equity and/or,  debt to fund any
negotiated  settlements  with our  outstanding  creditors  and meet our  ongoing
operating  expenses.  There is no  assurance  that we will be able to raise  the
necessary  equity  and/or  debt  that  we will  need  to be  able  to  negotiate
acceptable  settlements  with our  outstanding  creditors  or fund  our  ongoing
operating expenses.  We cannot make any assurances that we will be able to raise
funds through such activities.

RESULTS OF OPERATIONS

         During the fiscal  years ended June 30, 2008 and 2007,  we did not have
any revenues from operations.

         General and  administrative  expenses during the fiscal year ended June
30, 2008 were $663,270 compared to $1,835,973 for the fiscal year ended June 30,
2007.  The  decrease  of  $1,172,703  is mainly  attributable  to a decrease  in
stock-based  compensation  expense of  $743,750  and the  $440,612  decrease  in
consulting expenses.

         During the fiscal year ended June 30, 2008, we recognized a net loss of
$1,930,791  compared  to a net loss of  $4,460,541  during the fiscal year ended
June 30, 2007. The decrease of $2,529,750  primarily  resulted from the decrease

                                      -22-
<PAGE>

of $1,172,703 in general and  administrative  expenses,  discussed above and the
$1,198,000 provision for loss on the note receivable owed by BioAgra,  which was
recorded in 2007.

         We recorded a net loss applicable to common  shareholders of $1,970,901
during the year ended June 30,  2008  compared to  $4,473,691  during the fiscal
year  ended  June 30,  2007.  The  decrease  of  $2,502,790  was a result of the
decrease of $1,172,703 in general and administrative  expenses combined with the
$1,198,000 provision for loss on the note receivable owed by BioAgra,  which was
recorded in 2007. We  recognized a $40,110  deemed  dividend on preferred  stock
issued during the fiscal year ended June 30, 2008 compared to $13,150 during the
year ended June 30, 2007.

LIQUIDITY AND FINANCIAL CONDITION

         Net cash used in operating activities in 2008 was $598,599, compared to
net cash used in operating activities in 2007 of $612,724. In 2008, the net cash
used  represented a net loss of $1,930,791,  adjusted for certain non-cash items
consisting  of   depreciation   expense  of  $4,612,   equity  in  net  loss  of
unconsolidated  investees of $1,431,774  and a gain on the sale of investment in
unconsolidated investee of $164,234.

         In  2007,  the net cash  used  represented  a net  loss of  $4,460,541,
adjusted for certain  non-cash items  consisting of non cash consulting  expense
and  depreciation  expense of $441,584,  equity in net losses of  unconsolidated
investees  of  $1,426,590,  a  provision  for  loss  on  a  note  receivable  of
$1,198,000, and $743,750 in options issued for compensation.

         During the fiscal year ended June 30,  2008,  we raised  $930,125  cash
through  the sale of  6,168,333  shares of its  restricted  common  stock to our
controlling shareholder, Arizcan.

         During the fiscal year ended June 30, 2007, we raised  $1,255,950  cash
through the sale of 8,373,000 shares of its restricted common stock.

         During the fiscal year ended June 30, 2007, we raised $251,900  through
the sale of a warrant to purchase  6,000,000 shares of restricted  common stock.
The warrant has an exercise price of $0.50 per share and provides for a cashless
exercise.

         During the fiscal year ended June 30, 2007, we raised $500,000  through
the sale of 500,000  shares of its Series A  nonconvertible  preferred  stock to
Arizcan.  The shares provide that when voting as a single class, the shares have
the votes and voting  power that at all times is greater by 1% than the combined
voting power of all other classes of securities  entitled to vote on any matter.
As a result of the issuance,  Arizcan acquired  approximately  51% of the voting
power of the Company.  We have a right, solely at the Company's  discretion,  to
redeem the shares in ten years at 130% of deemed par value.

         During the fiscal year ended June 30, 2008, we raised  $89,500  through
advances from our majority shareholder,  Arizcan.  These funds are unsecured and
due on demand.  During the year ended June 30,  2008,  we repaid  $50,000 of the
advances and currently owe $39,500.

         During the fiscal year ended June 30, 2007, we raised  $50,000  through
an unsecured, 8% promissory note, due in March 2008. In June 2007, the holder of
the note agreed to accept  333,333  shares of our common stock as payment on the
note.

         During the year ended June 30, 2006,  we loaned  $1,686,570  to BioAgra
through a series of  secured,  7.5%  promissory  notes,  which were due over the
period from June 30 through  October 31, 2006.  On June 26,  2006,  we agreed to
combine  all of the  promissory  notes and accrued  interest  of $40,257  into a
$1,726,827  secured,  7.5%  promissory  note with  payments  to be made  monthly
starting  October 31, 2006,  through  October 31, 2007. The funds were loaned to
facilitate  BioAgra's  completion  of its first  production  line and to support
operations.  The  promissory  note  is  collateralized  by all  BioAgra  assets.
Additionally,  the  promissory  note  is  to  be  paid  in  full  prior  to  any
distributions  being made to the members of the joint  venture.  During the year

                                      -23-
<PAGE>

ended June 30, 2007,  the note was reduced by $1,371,269,  which  represents the
excess of the BioAgra  losses  recognized  by us over the adjusted  basis of our
equity investment in BioAgra remaining at June 30, 2007.

         During the year ended June 30, 2007, we advanced  $1,182,784 to BioAgra
at 7.5% interest.  During the year ended June 30, 2008, we advanced  $921,237 to
BioAgra  at  7.5%  interest.  We  have  classified  these  notes  receivable  as
non-current  assets on the balance sheet and are not accruing  interest on these
notes  receivable,  as they are  currently  in default  and  non-performing.  In
September 2008, we filed foreclosure  proceedings in connection with the failure
to make payment on the notes.

         During the fourth  quarter of the year ended June 30,  2007,  we made a
decision  to  provide  for a loss on the  value  of the  note  receivable.  This
decision  was based on factors  including  our  evaluation  of past and  current
operating  results,  failure  of  BioAgra  to make  scheduled  payments  and our
continuing support of the operational efforts of BioAgra. We also considered the
estimated fair value of BioAgra's assets and liabilities in making the decision.
As a result of this  decision,  we recorded a charge of $1,198,000 in the fourth
quarter ended June 30, 2007.

         During the year ended June 30,  2008,  we did not have any  significant
operations,  and our  management  spent a majority of the fiscal  year,  raising
additional  funds for the BioAgra  investment  and  supporting  it marketing and
sales efforts.  During the 2009 fiscal year we intend to continue our efforts to
aid  BioAgra  with the  continuing  development  of its  sales,  nationally  and
internationally  in other animal feed markets,  such as the equine and the swine
markets.

         To the extent our  operations  are not  sufficient  to fund our capital
requirements,  we may enter  into a  revolving  loan  agreement  with  financial
institutions or attempt to raise capital through the sale of additional  capital
stock or through  the  issuance of debt.  At the  present  time we do not have a
revolving loan agreement with any financial  institution  nor can we provide any
assurance that we will be able to enter into any such agreement in the future or
be able to raise funds through the further issuance of debt or equity.

         In addition,  the United States is experiencing  severe  instability in
the  commercial and  investment  banking  systems which is likely to continue to
have  far-reaching  effects  on the  economic  activity  in the  country  for an
indeterminable period. The long-term impact on the United States economy and the
Company's operating  activities and ability to raise capital cannot be predicted
at this time, but may be substantial.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In December  2007,  the FASB issued  Statement of Financial  Accounting
Standards  (SFAS) No. 141  (Revised  2007),  BUSINESS  COMBINATIONS,  ("SFAS No.
141R").  SFAS No. 141R will change the  accounting  for  business  combinations.
Under SFAS No. 141R,  an acquiring  entity will be required to recognize all the
assets acquired and liabilities assumed in a transaction at the acquisition-date
fair  value  with  limited  exceptions.  SFAS No.  141R  will  also  change  the
accounting  treatment and  disclosure  for certain  specific items in a business
combination.  SFAS No. 141R applies  prospectively to 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.  Accordingly,  any
business  combinations  the Company  engages in will be recorded  and  disclosed
following  existing GAAP until July 1, 2009.  The Company's  management  expects
SFAS No. 141R will have an impact on accounting for business  combinations  once
adopted, but the effect is dependent upon acquisitions at that time.

         In  December  2007,  the  FASB  issued  SFAS  No.  160,  NONCONTROLLING
INTERESTS IN CONSOLIDATED FINANCIAL  STATEMENTS--AN  AMENDMENT OF ARB NO. 51, OR
SFAS NO. 160. SFAS No. 160  establishes  new accounting and reporting  standards
for the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary.  SFAS No. 160 is effective  for fiscal  years  beginning on or after
December 15, 2008.  Management  believes  that SFAS 160 will not have a material
impact on the Company's financial position or results of operations.

         In May 2008,  the FASB  issued FASB Staff  Position  (FSP) No. APB 14-1
"ACCOUNTING FOR CONVERTIBLE  DEBT  INSTRUMENTS  THAT MAY BE SETTLED IN CASH UPON
CONVERSION  (INCLUDING  PARTIAL CASH  SETTLEMENT)"  (FSP APB 14-1). FSP APB 14-1
requires the issuer of certain  convertible debt instruments that may be settled
in cash (or other assets) on conversion to separately  account for the liability
(debt) and equity  (conversion  option) components of the instrument in a manner
that reflects the issuer's  non-convertible debt borrowing rate. FSP APB 14-1 is
effective for fiscal years  beginning  after  December 15, 2008 on a retroactive
basis and will be adopted by the  Company in the first  quarter of fiscal  2009.
The  Company  does not  expect the  adoption  of FSP APB 14-1 to have a material
effect on its results of operations and financial condition.

                                      -24-
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The discussion  and analysis of our financial  condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America. The preparation of these financial statements requires
us to make  estimates and judgments  that affect the reported  amounts of assets
and  liabilities,  revenues and expenses and related  disclosures  of contingent
assets and  liabilities.  On an  on-going  basis,  we  evaluate  our  estimates,
including  those  related to deferred  revenues;  depreciation  or property  and
equipment,  intangible  assets  such  as our  intellectual  property,  financing
operations,  currency  valuations and contingencies and litigation.  We base our
estimates on historical  experience  and on various other  assumptions  that are
believed to be reasonable under the circumstances, the results of which form the
basis for making  judgments  about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

         We believe that the following are some of the more critical  accounting
policies  and  estimates   (that  is  those  that  require  the  application  of
significant judgments by management as to their selection and valuation) used by
us:

         O        stock based compensation;

         O        long-lived assets;

         O        investments  in  and  notes  and  advances   receivable   from
                  unconsolidated investees;

         O        international operations;

         O        revenue recognition and deferred revenue;

         O        litigation; and

         O        contractual obligations.

STOCK-BASED COMPENSATION

         Beginning  July 1, 2006,  we adopted the  provisions of and account for
stock-based  compensation in accordance  with Statement of Financial  Accounting
standards  No. 123 - revised  2004 ("SFAS  123R"),  SHARE-BASED  PAYMENT,  which
replaced  Statement  of Financial  Accounting  Standards  No. 123 ("SFAS  123"),
ACCOUNTING FOR STOCK-BASED COMPENSATION, and supersedes APB Opinion No. 25 ("APB
25"), ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. Under the fair value recognition
provisions of this statement,  stock-based  compensation cost is measured at the
grant date based on the fair value of the award and is  recognized as expense on
a straight-line  basis over the requisite  service period,  which is the vesting
period. We elected the  modified-prospective  method,  under which prior periods
are not revised for comparative purposes.  The valuation provisions of SFAS 123R
apply to new grants and to grants that were outstanding as of the effective date
and are subsequently modified. All options granted prior to the adoption of SFAS
123R and outstanding during the periods presented were fully-vested.

LONG-LIVED ASSETS

         We assess  the  impairment  of  long-lived  assets  whenever  events or
changes  in   circumstances   indicate  that  the  carrying  value  may  not  be
recoverable.  Factors we consider  important  that could  trigger an  impairment
review include negative  projected  operating  performance by us and significant
negative  industry or economic trends. We do not believe that there has been any
impairment to long-lived assets as of June 30, 2008.

                                      -25-
<PAGE>

INVESTMENTS IN AND NOTES AND ADVANCES RECEIVABLE FROM UNCONSOLIDATED INVESTEES

         Entities where we can exercise significant influence,  but not control,
are  accounted  for under the  equity  method of  accounting.  Whether or not we
exercise  significant  influence  with  respect  to  a  company  depends  on  an
evaluation of several factors  including,  among others,  representation  on the
company's board of directors and ownership level,  generally 20% to 50% interest
in the voting  securities of the company including voting rights associated with
our  holdings in common,  preferred  and other  convertible  instruments  in the
company.  Under the equity  method of  accounting,  our share of the earnings or
losses of these companies is included in the equity income (loss) section of the
consolidated statements of operations.

         A loss in value of an investment in or in the expected  relizability of
notes and advances receivable from an unconsolidated investee that is other than
a temporary decline is recognized as a charge to operations.  Evidence of a loss
in value might include,  but would not  necessarily be limited to, absence of an
ability to recover the carrying  amount of the  investment or notes and advances
receivable  or inability of the  investee to sustain an earnings  capacity  that
would  justify  the  carrying  amount of the  investment  or notes and  advances
receivable.

NOTES AND ADVANCES RECEIVABLE

         Notes and advances  receivable consist of promissory notes and advances
made to our unconsolidated investee,  BioAgra. Notes and advances receivable are
recorded net of an  allowance  for  uncollectible  receivables.  Allowances  for
estimated losses from uncollectible  loans are recorded when it is probable that
the  counterparty  (BioAgra)  will be unable to pay all amounts due according to
the terms of the promissory notes and advances receivable.

         The  Company  stops  accruing  interest  on a loan when the  borrower's
ability  to meet  contractual  payments  is in  doubt.  For  notes  which are on
nonaccrual  status,  it is the Company's policy to reverse  interest  previously
accrued  on the  loan  against  interest  income.  Interest  on  such  loans  is
thereafter  recorded  on a cash  basis and is  included  in  earnings  only when
actually  received  in cash and when  full  payment  of  principal  is no longer
doubtful.

         A  receivable  is  considered  impaired  when it is  probable  that all
amounts will not be  collected as they become due  according to the terms of the
loan.  Generally,  impaired loans are accounted for on a nonaccrual  basis.  The
extent of  impairment  is  measured  based  upon a  comparison  of the  recorded
investment in the loan with either the expected cash flows  discounted using the
loan's  original  effective  interest  rate or the fair value of the  underlying
collateral if the loan is collateral dependent.

INTERNATIONAL OPERATIONS

         Our previously held foreign equity investee (ExypnoTech) operations are
located in Germany.  ExypnoTech  transactions  are conducted in currencies other
than the U.S.  dollar,  (the  currency into which the  subsidiaries'  historical
financial  statements have been translated)  primarily the Euro. As a result, we
are  exposed to  adverse  movements  in  foreign  currency  exchange  rates.  In
addition, foreign political and economic environment,  trade barriers,  managing
foreign  operations  and  potentially  adverse  tax  consequences.  Any of these
factors  could have a material  adverse  effect on our  financial  condition  or
results of operations in the future.

REVENUE RECOGNITION AND DEFERRED REVENUE

         Our revenue  recognition  policy is significant  because future revenue
could be a key  component  of our  results or  operations.  Revenue  results are
difficult  to  predict,  and any  shortfall  in revenue or delay in  recognizing
revenue could cause operating results to vary significantly.

                                      -26-
<PAGE>

LITIGATION

         We are involved in certain legal proceedings, as described in Item 3 of
this report and Note 9 to the consolidated financial statements included in this
report.

         We intend to vigorously  prosecute these legal proceedings and does not
believe the outcome of these  proceedings will have a material adverse effect on
the financial condition, results of operations or our liquidity.  However, it is
too early at this time to determine the ultimate  outcome of these matters or to
estimate the minimum losses, if any, to be incurred in these matters.


CONTRACTUAL OBLIGATIONS

         For  more  information  on our  contractual  obligations  on  operating
leases,  refer to Note 9 of the consolidated  financial  statements  included in
this report.  At June 30, 2008, our commitments  under these obligations were as
follows:

 YEAR ENDING JUNE 30,                  OPERATING LEASES

         2009                         $           39,415
         2010                                     40,618
         2011                                     41,822
         2012                                     10,531
                                      -------------------
                                      $          132,386
                                      ===================

OFF-BALANCE SHEET ARRANGEMENTS

         We do not maintain any  off-balance  sheet  arrangements  that have, or
that are reasonably  likely to have, a material  current or future effect on our
financial  condition,  changes in  financial  condition,  revenues or  expenses,
results of operations, liquidity, capital expenditures or capital resources.

ITEM 7. FINANCIAL STATEMENTS

         The consolidated financial statements and related financial information
required  to be  filed  with  this  report  are  indexed  on  page  F-1  and are
incorporated herein.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

         None.

ITEM 8A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company,  under the supervision and with the  participation of the Company's
management,   including  the  Company's  Chief  Executive  Officer/Acting  Chief
Financial  Officer,  performed an evaluation of the  effectiveness of the design
and operation of the Company's disclosure controls and procedures as of June 30,
2008.  Based  on that  evaluation,  the  Chief  Executive  Officer/Acting  Chief
Financial Officer  concluded that,  because of the material weakness in internal
control over  financial  reporting  described  below,  the Company's  disclosure
controls and procedures were not effective as of June 30, 2008.

                                      -27-
<PAGE>

ITEM 8(A)T.  INTERNAL CONTROLS AND PROCEDURES

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Management is responsible for  establishing  and  maintaining  adequate
internal  control  over  financial  reporting,  as such term is  defined  in the
Securities   Exchange  Act  of  1934  Rule   13a-15(f).   Our  Chief   Executive
Officer/Acting   Chief  Financial   Officer   conducted  an  evaluation  of  the
effectiveness  of our internal  control over  financial  reporting  based on the
framework in Internal Control - Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission ("COSO Framework").

         Based on this  evaluation,  management  has concluded that our internal
control over  financial  reporting  was not  effective as of June 30, 2008.  Our
principal Chief Executive  Officer/Acting  Chief Financial  Officer concluded we
have a material  weakness in our ability to produce  financial  statements  free
from material  misstatements.  Management reported a material weakness resulting
from the combination of the following significant deficiencies:

         -        a lack of  segregation  of duties in accounting  and financial
                  reporting activities; and

         -        a  lack  of  a  sufficient  number  of  qualified   accounting
                  personnel; and

         -        a lack of documentation and review of financial information by
                  accounting personnel with direct oversight responsibility.

         Our Chief  Executive  Officer  has also  served as our Chief  Financial
Officer  since  February  2007.  We believe  that the lack of a full-time  Chief
Financial Officer has resulted in a significant  deficiency in internal controls
over financial reporting due to the lack of qualified  accounting personnel with
sufficient  time  to  regularly  and  adequately  review  complex,  nonrecurring
transactions.  In  addition,  the Company  employs only one  individual  that is
responsible for the processing of all recurring  transactions.  While management
is actively  involved in the daily  activities  of the  Company,  including  the
review of  transactions,  it is difficult  to  adequately  segregate  accounting
duties within the Company in a manner to prevent a material weakness in internal
controls over financial reporting.

         Subsequent  to the  discovery  of the  material  weakness  in  internal
control over  financial  reporting  described  above and beginning in the fiscal
quarter ending September 30, 2007, we initiated and plan to undertake changes to
our internal  control over financial  reporting to remediate the  aforementioned
deficiency  and to  strengthen  our internal  control  processes,  including the
seeking of  additional  accounting  staff and/or the  consultation  with outside
resources as we deem appropriate.  While the costs of remediation are unknown at
this time, we expect that the costs may exceed $300,000, which would include the
hiring of a new Chief Financial Officer and, in the interim,  the contracting of
accounting staff and/or the consultation with outside resources.  Our ability to
initiate and undertake changes is confined by our financial resources.

         This  annual  report  does not  include  an  attestation  report of the
Company's  independent  registered  public  accounting  firm regarding  internal
control  over  financial  reporting.  Management's  report  was not  subject  to
attestation  by the Company's  independent  registered  public  accounting  firm
pursuant to  temporary  rules of the  Securities  and Exchange  Commission  that
permit the Company to provide only  management's  report on internal  control in
this annual report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

         There were no changes in internal control over financial reporting that
occurred  during  the last  fiscal  quarter  covered  by this  report  that have
materially affected,  or are reasonably likely to affect, the Company's internal
control over financial reporting.

ITEM 8B. OTHER INFORMATION

         None.

                                      -28-
<PAGE>
<TABLE>
<CAPTION>
                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

         Our executive officers and directors are as follows:
<S>                                <C>
  NAME, AGE AND YEAR FIRST             PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
    ELECTED OR APPOINTED
--------------------------------   -----------------------------------------------------
Paul H. Metzinger                  Mr.  Metzinger was our President and Chief  Executive
Age:  69                           Officer from February 26, 1998 to May 6, 1998 and has
1998                               served in that same capacity from December 1, 1998 to
                                   present. In addition,  Mr. Metzinger has been serving
                                   as acting Chief  Financial  Officer since February of
                                   2007. He has been a director since February 26, 1998.
                                   He has  served as a  Manager  and Vice  President  of
                                   BioAgra  since  August  15,  2005.  He  served as the
                                   General  Manager of NanoPierce Card from January 2000
                                   to June  2003.  Prior to  becoming  a  director,  Mr.
                                   Metzinger   practiced   securities   law  in  Denver,
                                   Colorado for over 32 years.  Mr.  Metzinger  received
                                   his J.D. degree in 1967 from Creighton University Law
                                   School and his L.L.M.  from Georgetown  University in
                                   1969.

Herbert J. Neuhaus                 Dr.  Neuhaus  has been a  director  since  January 1,
Age:  47                           1999.  Since  January 1999, he has been our Executive
1999                               Vice  President of Marketing and  Technology.  He was
                                   the   President  and  Chief   Executive   Officer  of
                                   NanoPierce  Connection from January 2002 to September
                                   2003. Dr. Neuhaus  previously  served as the Managing
                                   Director of Particle  Interconnect  Corporation  from
                                   August 18, 1997 to November 1, 1997. From August 1989
                                   to August 1997, he was associated with the Electronic
                                   Material   Venture   Group   in  the   New   Business
                                   Development  Department  of Amoco  Chemical  Company,
                                   Naperville,  Illinois.  While  associated  with Amoco
                                   Chemical  Company  he  held  among  other  positions:
                                   Business  Development  Manager/Team  Leader;  Project
                                   Manager--High Density  Interconnect;  Product Manager
                                   MCM Products and as a research scientist. Dr. Neuhaus
                                   received  his  Ph.D.   degree  in  Physics  from  the
                                   Massachusetts  Institute  of  Technology,  Cambridge,
                                   Massachusetts  in  1989  and his BS in  Physics  from
                                   Clemson University, Clemson, South Carolina in 1980.

Robert Shaw, Ph.D.                 Dr.  Shaw has been our  director  since  October  31,
Age:  69                           2000. Dr. Shaw currently is an Assistant Professor of
2000                               Physics at Farleigh Dickinson University where he has
                                   served on the faculty since  September 1988. Dr. Shaw
                                   also performs  professional  research in his academic
                                   areas of specialty,  and has held, among others,  the
                                   positions   of  Research   Chemist  at  the  American
                                   Cyanamid  Research  Laboratories,   Stamford;  Senior
                                   Research  Physicist at Exxon Research and Engineering
                                   Company; Manager of New Business Development at Exxon
                                   Enterprises,  Exxon  Corporation,  New York,  NY; and
                                   President of Robert Shaw Associates,  Inc.,  Chatham,
                                   NJ.  Dr.  Shaw  received  his  Ph.D.  in Solid  State
                                   Physics   form   Cambridge   University,   Cambridge,
                                   England.  He was among the first to conduct  academic
                                   research  on  electronic   conduction  mechanisms  in
                                   amorphous  semiconductors.  He  received  a  B.S.  in
                                   Inorganic  Chemistry with a minor in Nuclear  Physics
                                   from North Carolina State University, Raleigh, NC.

John Hoback                        Mr.  Hoback has been our  director  since April 2002.
Age:  69                           Mr. Hoback  currently  serves as the President of Z&H
2002                               Enterprises  Solutions,  Ltd.,  which position he has
                                   held since 2000.  Among other  positions,  Mr. Hoback
                                   was the Director of  Marketing  and Sales of CTS from
                                   1999  to  2000  and  was  the   Venture   Manager  of
                                   Electronics with Amoco Chemical from 1988 to 1999.
</TABLE>

                                      -29-
<PAGE>

         There are no family  relationships  that exist  between any director or
executive officer.

CODE OF ETHICS

         Vyta  Corp has  adopted  a Code of  Ethics  that  applies  to the Chief
Executive Officer,  Chief Financial Officer,  Controller,  Principal  Accounting
Officer  and  those  employees  performing  similar  functions.  A  copy  of the
Company's   Code   of   Ethics   is   available   on   the   Company's   website
(www.vytacorp.com).  We intend to  disclose  amendments  to,  or  waivers  from,
provisions of the Code of Ethics by posting such information on its website. The
contents of our website are not part of this Annual Report on Form 10-KSB.

CHANGES IN DIRECTOR NOMINATION

         There have been no material changes to the procedures by which security
holders may recommend nominees to our board of directors.

AUDIT COMMITTEE AND FINANCIAL EXPERT

         Since the Company is not  required to have,  and does not have an audit
committee,  our board of  directors  perform  the  responsibilities  of an audit
committee,  providing  oversight  of  our  accounting  and  financial  reporting
functions and internal controls. Our board of directors is likewise not required
to designate and has not designated a Financial Expert, as defined by the SEC.





















                                      -30-
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

         The  following  table  sets  forth  information  with  respect  to  the
compensation  paid or earned during the fiscal year ended June 30, 2008 and 2007
by our Chief  Executive  Officer  (Principal  Executive  Officer  and  Principal
Financial Officer) who served in such capacity during the fiscal year ended June
30, 2008 ("Named Executive Officers"), in all capacities in which they served.

                         2008 SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-----------  ----  --------  ------- -------  ---------  --------------  --------------   --------------  ---------
   NAME AND  YEAR   SALARY   BONUS   STOCK     OPTION    NON-EQUITY       CHANGE IN
  PRINCIPAL           ($)     ($)    AWARDS    AWARDS   INCENTIVE PLAN   PENSION VALUE
   POSITION                            ($)       ($)     COMPENSATION         AND
                                                             ($)        NON-QUALIFIED
                                                                           DEFERRED
                                                                         COMPENSATION       ALL OTHER
                                                                           EARNINGS       COMPENSATION     TOTAL
                                                                              ($)              ($)          ($)
    (A)      (B)     (C)      (D)     (E)        (F)          (G)             (H)              (I)          (J)
-----------  ----  --------  ------- -------  ---------  --------------  --------------   --------------  ---------
<S>          <C>   <C>       <C>              <C>        <C>             <C>              <C>             <C>
Paul         2008  $ 96,250      --       --  $      --              --              --               --  $ 96,250
Metzinger    2007   105,000      --       --    305,000              --              --               --   410,000
CEO,
President,
Acting CFO
-----------  ----  --------  ------- -------  ---------  --------------  --------------   --------------  ---------
</TABLE>




                2008 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
<TABLE>
<CAPTION>

                                     OPTION AWARDS                                         STOCK AWARDS
              -------------------------------------------------------------  ------------------------------------------
              EXERCISABLE   UNEXERCISABLE
-----------   ------------ -------------- -----------  --------  ----------  ---------  --------  --------- -----------
    NAME       NUMBER OF      NUMBER OF      EQUITY     OPTION     OPTION      NUMBER    MARKET     EQUITY    EQUITY
               SECURITIES    SECURITIES    INCENTIVE   EXERCISE  EXPIRATION      OF     VALUE OF  INCENTIVE INCENTIVE
               UNDERLYING    UNDERLYING      PLAN        PRICE      DATE       SHARES    SHARES      PLAN      PLAN
              UNEXERCISED    UNEXERCISE      AWARDS:      ($)                 OR UNITS  OR UNITS    AWARDS:   AWARDS:
                OPTIONS        OPTIONS     NUMBER OF                          OF STOCK  OF STOCK    NUMBER    MARKET
                  (#)            (#)       SECURITIES                           THAT      THAT        OF        OR
                                           UNDERLYING                         HAVE NOT  HAVE NOT   UNEARNED  PAYOUT
                                           UNEXERCISED                         VESTED     BEEN      SHARES,   VALUE OF
                                            UNEARNED                             (#)     VESTED    UNITS OR  UNEARNED
                                             OPTIONS                                       ($)      OTHER     SHARES,
                                               (#)                                                  RIGHTS    UNITS OR
                                                                                                     THAT      OTHER
                                                                                                   HAVE NOT   RIGHTS
                                                                                                    VESTED     THAT
                                                                                                     (#)     HAVE NOT
                                                                                                              VESTED
                                                                                                               ($)
     (A)          (B)            (C)           (D)        (E)       (F)          (G)       (H)       (I)       (J)
-----------   ------------ -------------- -----------  --------  ----------  ---------  --------  --------- -----------
<S>           <C>          <C>            <C>          <C>       <C>         <C>        <C>       <C>       <C>
Paul                                                             3/12/99
Metzinger           15,000              --          --     10.40 3/12/09          --        --        --        --

Paul                                                             3/17/07
Metzinger        1,000,000              --          --      0.32 3/17/17          --        --        --        --

</TABLE>

                                      -31-
<PAGE>

2008 GRANTS OF PLAN-BASED AWARDS

         There were no grants of plan-based awards to any of the Named Executive
Officers during the fiscal year ended June 30, 2008.

2008 OPTION EXERCISES AND STOCK VESTED

         There were no exercises of options or vesting of stock awards by any of
the Named Executive Officers during the fiscal year ended June 30, 2008.

2008 PENSION BENEFITS

         We do not have a benefit pension plan.

2008 NON-QUALIFIED DEFERRED COMPENSATION

         We  do  not  have  a  nonqualified   defined   contribution   or  other
nonqualified deferred compensation plans.

EMPLOYMENT  CONTRACTS  AND  TERMINATION  OF  EMPLOYMENT  AND  CHANGE IN  CONTROL
ARRANGEMENTS

         On March 15, 2004, we entered into an employment agreement with Paul H.
Metzinger to serve as our President and Chief Executive Officer.  The employment
agreement with Mr.  Metzinger  expires March 14, 2008. The employment  agreement
was renewed for an additional  five (5) years ended March 13, 2013.  Pursuant to
his  employment  agreement,  we agreed to pay Mr.  Metzinger an annual salary of
$150,000.  In March 2005,  Mr.  Metzinger took a salary cut to receive an annual
salary of $105,000.

         In connection  with the  employment  agreements,  generally,  we or the
employee  may  terminate  the  employment  agreement at any time with or without
cause.  In the  event we  terminate  an  employment  agreement  for cause or the
employee  terminates his or her employee  agreement  without cause,  all of such
employee's rights to compensation would cease upon the date of such termination.
If we  terminate an  employment  agreement  without  cause,  then such  employee
terminates  his or her  employment  agreement  for  cause,  or in the event of a
change in control,  we are required to pay to such employee all compensation and
other  benefits  that would have accrued  and/or been  payable to that  employee
during the full term of the employment agreement.

         A change of control is considered to have occurred when, as a result of
any type of corporate  reorganization,  execution of proxies,  voting  trusts or
similar  arrangements,  a person  or  group of  persons  (other  than  incumbent
officers,  directors and our principal stockholders) acquires sufficient control
to elect more than a majority of our board of directors, acquires 50% or more of
our  voting  shares,  or we  adopt a plan of  dissolution  of  liquidation.  The
employment agreement also include a non-compete and nondisclosure  provisions in
which  each  employee  agrees  not to  compete  with  or  disclose  confidential
information  regarding  us and our  business  during the term of the  employment
agreement and for a period of one year thereafter.

         On March 15, 2004, we entered into an employment  agreement with Kristi
Kampmann  to serve as our Chief  Financial  Officer.  Ms.  Kampmann  resigned on
February  28,  2007 and we have no  further  obligations  under  the  agreement.
However,  pursuant  to the  agreement,  Ms.  Kampmann  agreed to a twelve  month
non-compete  clause that  prohibits  working in certain  industries,  as well as
requires confidentiality.

STOCK OPTION PLANS

         We have two Stock Option Plans. As of October 10, 2008, 206,127 options
are  outstanding  under the 1998  Compensatory  Stock Option Plan and  2,437,000
options are  outstanding  under the 2000  Compensatory  Stock Option Plan, for a
total of  2,643,127  options  outstanding.  A total  of  2,643,127  options  are
exercisable at October 10, 2008,  under these plans.  During the year ended June
30, 2008, we did not issue or grant any options.

                                      -32-
<PAGE>

         During the year ended June 30, 2007, we issued 2,350,000  options under
the 2000 Compensatory Stock Option Plan to officers, directors and one employee.
We have  reserved  375,000  shares of common stock for  issuance  under the 1998
Compensatory Stock Option Plan. In January 2002, our board of directors passed a
resolution  closing the 1998 Compensatory  Stock Option Plan for issuance of new
options.  We have reserved  2,480,000  shares of common stock for issuance under
the 2000 Compensatory  Stock Option Plan. During the fiscal years ended June 30,
2008 and 2006,  there was no action  taken to reprice  any  options  held by any
officers, directors or employees.

DIRECTOR COMPENSATION

         We hold  quarterly  meetings of the board of directors.  Although we do
not  have  any  standard  arrangements  pursuant  to  which  our  directors  are
compensated  for any  services  provided  as a  director  or for  attendance  at
meetings of the board of directors,  if our financial situation is adequate,  we
compensate directors $1,000 per meeting, plus reasonable travel expenses. During
the  fiscal  year ended June 30,  2008,  our  officers  and  directors  were not
compensated for attendance at board meetings.

<TABLE>
<CAPTION>
                      DIRECTOR COMPENSATION IN FISCAL 2008

                                                                         CHANGE IN
                                                                       PENSION VALUE
                                                                            AND
                      FEES                                              NONQUALIFIED
                    EARNED OR                            NON-EQUITY       DEFERRED
                     PAID IN     STOCK       OPTION     INCENTIVE PLAN   COMPENSATION      ALL OTHER
                      CASH       AWARDS      AWARDS      COMPENSATION      EARNINGS      COMPENSATION      TOTAL
       NAME            ($)        ($)         ($)           ($)              ($)             ($)            ($)
       (A)             (B)        (C)         (D)           (E)              (F)             (G)            (H)

<S>                  <C>         <C>        <C>         <C>             <C>               <C>           <C>
Paul Metzinger       $      --         --    $    --               --              --     $    96,250   $  96,250

Herbert Neuhaus             --         --         --               --              --              --        --

Robert Shaw                 --         --         --               --              --              --        --

John Hoback                 --         --         --               --              --              --        --
</TABLE>

COMPENSATION DISCUSSION AND ANALYSIS

GENERAL PHILOSOPHY AND OBJECTIVES

         In 2004, we began changing our principal  business and investments from
electronics  technology to  biotechnology.  Through our 50% interest in BioAgra,
LLC, we and BioAgra hope to generate  revenue through the production and sale of
Agrastim(R)  and  Purestim(TM).  While  BioAgra  has  recently  signed its first
agreement for the distribution of Agrastim(R),  BioAgra has generated no revenue
and is  currently  incurring  net  losses  in each  quarter.  Due to our lack of
revenue and continuing net losses,  the board of directors has not established a
general  philosophy  pertaining to the  compensation of our executive  officers.
However,  should we begin to  generate  revenue  in the  future,  the board will
establish formal  objectives and policies for the compensation of our executives
that is tied to the generation of value for our stockholders.

BASE SALARIES

         We  believe  that the base  salary  level of our  executive  officer is
reasonably  related to our current  revenue  levels.  Base salaries are reviewed
annually,  and any  increases  in base salary take into  account such factors as
individual past performance, changes in responsibilities,  changes in pay levels
of  companies  deemed  comparable  by us,  inflation  and our overall  financial

                                      -33-
<PAGE>

position.  The annual base salary for Mr.  Metzinger was $150,000 as required by
the terms of his employment  agreement with us. However,  due to our net losses,
Mr.  Metzinger  has  voluntarily  chosen to reduce his annual salary to $105,000
until such time as we begin generating revenues.

ANNUAL CASH BONUSES

         At this time, we do not pay annual cash bonuses to our Named  Executive
Officers.

LONG-TERM INCENTIVE COMPENSATION

         At  this  time,  we do not  award  equity  compensation  to  our  Named
Executive Officers.

PARTICIPATION OF NAMED EXECUTIVE OFFICERS IN COMPENSATION  DECISIONS RELATING TO
THEM

         Compensation decisions for the Named Executive Officers are made by the
board of directors.  To the extent that a Named Executive Officer is a member of
the board, they recuse themselves from the discussions or and do not participate
in compensation decisions that relate to them.

         TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION

         Section  162(m) of the Code  disallows a tax deduction for any publicly
held  corporation  for individual  compensation of more than $1.0 million in any
taxable year to any named executive  officers,  other than  compensation that is
performance-based  under a plan that is  approved by the  Stockholders  and that
meets certain other technical  requirements.  Our policy with respect to Section
162(m)  is to make  every  reasonable  effort  to ensure  that  compensation  is
deductible to the extent permitted while simultaneously providing our executives
with   appropriate   rewards   for  their   performance.   In  the   appropriate
circumstances,  however,  we are  prepared to exceed the limit on  deductibility
under Section  162(m) to the extent  necessary to ensure our executive  officers
are compensated in a manner  consistent with our best interests and those of our
Stockholders.








                                      -34-

<PAGE>
ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

         The  following  table  sets forth  certain  information  regarding  the
beneficial ownership of outstanding shares of our common stock as of October 10,
2008  on a  fully  diluted  basis,  by  (a)  each  person  known  by us  to  own
beneficially  5% or more of the  outstanding  shares  of common  stock,  (b) our
directors,  Named  Executive  Officers,  and (c) all our directors and executive
officers as a group.

  NAME, ADDRESS & NATURE OF
       BENEFICIAL OWNER                    AMOUNT          PERCENT OF CLASS(7)
-------------------------------        --------------      -------------------
Arizcan Properties, Ltd.                12,002,770 (1)               26%
625 South Alten Way, Suite 3A
Denver, CO  80247

The Paul H. Metzinger Trust              1,186,585 (2)              2.64
Paul H. Metzinger
President, CEO & CFO, Director
370 Seventeenth Street
Suite 3640
Denver, CO  80202

The Cheri L. Metzinger Trust             1,186,585 (3)              2.64
Cheri L. Metzinger
Wife of Paul H. Metzinger
3236 Jellison Street
Wheatridge, CO  80033

Dr. Herbert J. Neuhaus                     317,500 (4)              0.71
Director
770 Maroonglen Court
Colorado Springs, CO  80906

Dr. Robert E. Shaw, Director               270,000 (5)              0.60
8 Nicklaus Court
Florham Park, NJ  07932

John Hoback, Director                      270,000 (6)              0.60
20 White Heron Lake
East Stroudsburg, PA  18301

All Officers & Directors as a Group      2,044,085                  4.54
(4 persons)
--------------------
*Less than 0.01%.

(1)      Arizcan  Properties  is  wholly-owned  by Triumphant  Partners,  LLC, a
         Colorado limited  liability  company,  which is owned by Stan Richards.
         Includes  11,995,000  common shares held directly and  beneficially and
         7,770 common shares that are held by Stan Richards.

(2)      Includes  53,697 common shares held directly and  beneficially;  47,888
         common shares that Mr. Metzinger owns beneficially  though his wife and
         options held by Mr. Metzinger  consisting of options to purchase 10,000
         shares  exercisable  at $10.40 per share,  options to  purchase  75,000
         shares exercisable at $6.50 per share and options to purchase 1,000,000
         shares exercisable at $0.32 per share.

                                      -35-
<PAGE>

(3)      Cheri L.  Metzinger  is the wife of Mr.  Paul H.  Metzinger,  our Chief
         Executive Officer, Chief Financial Officer and President. This includes
         47,888 shares held directly and  beneficially and 53,697 common shares,
         1,085,000  common shares subject to options owned  beneficially  by her
         husband.

(4)      Based on options to purchase  25,000 shares  exercisable  at $42.50 per
         share,  options to  purchase  5,000  shares  exercisable  at $55.00 per
         share,  options to purchase  12,500  shares  exercisable  at $10.40 per
         share, options to purchase 25,000 shares exercisable at $4.00 per share
         and options to purchase 250,000 shares exercisable at $0.32 per share.

(5)      Based on options to purchase  12,500 shares  exercisable  at $19.40 per
         share,  options to  purchase  2,500  shares  exercisable  at $13.40 per
         share, options to purchase 5,000 shares exercisable at $40.00 per share
         and options to purchase 250,000 shares exercisable at $0.32 per share.

(6)      Based on options to purchase  15,000 shares  exercisable  at $14.00 per
         share, options to purchase 5,000 shares exercisable at $14.00 per share
         and options to purchase 250,000 shares exercisable at $0.32 per share.

(7)      Shares of our common stock  subject to options and  warrants  currently
         exercisable or  convertible,  or  exercisable or convertible  within 60
         days of October  10,  2008,  are deemed  outstanding  for  purposes  of
         computing  the  percentage  beneficially  owned by the person or entity
         holding those securities,  but are not deemed  outstanding for purposes
         of computing the percentage  beneficially  owned by any other person or
         entity.  Percentage  of  beneficial  ownership  is based on  45,013,178
         shares of our common stock  outstanding  as of the close of business on
         October 10, 2008.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table provides  information as of June 30, 2008 regarding
compensation plans (including individual compensation  arrangements) under which
shares  of our  common  stock  are  authorized  for  issuance.  No  class of our
securities  other than our common  stock or options to purchase our common stock
is authorized for issuance under any of our equity compensation plans.
<TABLE>
<CAPTION>

                                                          NUMBER OF         WEIGHTED-AVERAGE       NUMBER OF
                                                       SECURITIES TO BE    EXERCISE PRICE OF       SECURITIES
                                                         ISSUED UPON          OUTSTANDING          REMAINING
                                                         EXERCISE OF       OPTIONS, WARRANTS     AVAILABLE FOR
                                                         OUTSTANDING           AND RIGHTS       FUTURE ISSUANCE
                                                       OPTIONS, WARRANTS          (B)             UNDER EQUITY
                                                          AND RIGHTS                              COMPENSATION
                                                             (A)                                PLANS (EXCLUDING
                                                                                                   SECURITIES
                                                                                                 REFLECTED IN
                                                                                                   COLUMN (A)
                    PLAN CATEGORY                                                                      (C)
---------------------------------------------------    -----------------   ------------------   ------------------
<S>                                                    <C>                 <C>                  <C>
Equity compensation plans approved by security
holders                                                                0                   --                   0
Equity compensation plans not approved by security
holders(1)                                                     2,643,127   $             3.00             226,173
Total                                                          2,643,127   $             3.00             226,173
--------------------
</TABLE>

(1) The material  features of the plans not approved by the security holders are
described herein under "ITEM 10--EXECUTIVE COMPENSATION--Stock Option Plans."

CHANGE IN CONTROL

         As of October 10, 2008,  Arizcan  Properties,  Ltd. is our  controlling
shareholder. Arizcan Properties Ltd. may cause us to have a change of control if
they sell enough of our common stock. We are not aware of any present  intention
of Arizcan  Properties,  Ltd. to cause us to have a change of control and we are
not aware of any other arrangements that may result in a change of control.

                                      -36-
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH RELATED PERSONS

         During the year ended June 30, 2008, we issued to Arizcan  Properties a
total of 6,168,333  shares of  restricted  common stock in exchange for $930,125
cash.

         During the year ended June 30,  2008,  Arizcan  Properties  advanced us
cash of $39,500. We have repaid $5,000 at October 10, 2008.

         On March 2,  2007,  in a private  placement  transaction,  we issued to
Arizcan  Properties a total of 500,000 shares of our  newly-designated  series A
nonconvertible  preferred stock for a total purchase price of $500,000, in cash.
In addition  to the  purchase of the series A  nonconvertible  preferred  stock,
Arizcan  Properties  purchased  for a  purchase  price  of  $251,900  a  warrant
exercisable for 6,000,000  shares of common stock.  This warrant has an exercise
price of $0.50  per share  and  provides  for  cashless  exercise.  As a result,
Arizcan  Properties  acquired  approximately  51% of our voting power, and, on a
fully diluted basis,  Arizcan  Properties  would have  approximately  89% of our
voting power if they exercise the warrant.

         Mr. Metzinger, an officer and director,  during the year ended June 30,
2007, advanced us a total of $25,203. We have repaid these funds.

         During the year  ended June 30,  2007,  we issued  options to  purchase
2,350,000  shares of common stock to our officer and directors.  The options are
fully vested,  have a term of 10 years and an exercise price of $0.41 per share.
The options were determined to have a value of $743,750 using the  Black-Scholes
Model of valuation and certain assumptions considered appropriate by management.


RELATED PARTY TRANSACTION POLICY

         The board of directors  recognizes that related party  transactions can
present  conflicts of interest and questions as to whether the  transactions are
in our best  interests.  Accordingly,  effective in September 2007, the board of
directors  adopted a written  policy  formalizing  the  policy  for the  review,
approval and ratification of transactions with related persons. For the purposes
of this policy,  a "related party  transaction" is a transaction or relationship
involving a director,  executive  officer or 5% stockholder  or their  immediate
family  members  that  is  reportable  under  the  SEC's  rules  regarding  such
transactions.

         Under our policy,  a related  party  transaction  should be approved or
ratified based upon a  determination  that the transaction is in, or not opposed
to, our best interests and on terms no less favorable to us than those available
with other parties. The policy provides for the board of directors to review and
approve  all  related  party  transactions,  other than  transactions  involving
amounts  less than  $100,000 in  aggregate.  Pursuant to the policy,  management
shall recommend any related party transaction,  including the proposed aggregate
value of the transaction,  if applicable.  After review,  the board of directors
shall approve or disapprove of such transaction.

DIRECTOR INDEPENDENCE

         We  have  voluntarily   adopted  the  NASDAQ   Marketplace   Rules  for
determining  whether a director is  independent  and our board of directors  has
determined that three of our four directors,  Messrs.  Neuhaus, Shaw and Hoback,
are  "independent"  within the meaning of Rule 4200(a)(15) of the NASDAQ Manual.
Mr. Metzinger is not independent under those standards.

ITEM 13.   EXHIBITS

         The following documents are filed as a part of this report.

         (i) FINANCIAL STATEMENTS. See Index to Financial Statements on page F-1
of this report.

                                      -37-
<PAGE>

         (ii)  EXHIBITS.  The following is a complete list of exhibits  filed as
part of this Form  10-KSB.  Exhibit  numbers  correspond  to the  numbers in the
Exhibit Table of Item 601 of Regulation S-K.
<TABLE>
<CAPTION>

EXHIBIT NO.                                               DESCRIPTION
----------  ------------------------------------------------------------------------------------------------------
<S>         <C>
    3.01*   Certificate  of  Designation  of Series A  Nonconvertible  Preferred Stock  (Incorporated by reference
            to the company's Current Report on Form 8-K, dated March 6, 2007)

   10.01*   Termination and Mutual General Release Agreement dated July 11, 2007 by and between Progressive
            Bioactives, Inc. and BioAgra LLC (Incorporated by reference to the company's Current Report on Form
            8-K, dated July 11, 2007)

   10.02*   Agreement, dated April 1, 2007 by and between AHD International, Inc. and BioAgra LLC (Incorporated by
            reference to the company's Current Report on Form 8-K, dated April 18, 2007)

   10.04*   Operating Agreement,  dated August 15, 2005, between the company and Xact Resources  International (now
            Justin Holdings, Inc. as a result of the  assignment  by Xact  Resources in February  2006),  Inc. for
            BioAgra,  LLC  (Incorporated  by reference to the company's  Current Report on Form 8-K, dated August 12, 2005)

    21#     Subsidiaries of the Company

    23#     Consent of Independent Registered Public Accounting Firm, GHP Horwath, P.C.

   31.1#    Certification   of  Chief   Executive   Officer   Pursuant  to  Rule 13A-14(a)/15d-14(a)  as  Adopted
            Pursuant  to  Section  302  of the Sarbanes-Oxley Act of 2002.

   31.2#    Certification   of  Chief   Financial   Officer   Pursuant  to  Rule 13A-14(a)/15d-14(a)  as  Adopted
            Pursuant  to  Section  302  of the Sarbanes-Oxley Act of 2002.

   32.1#    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
            Section 906 of the Sarbanes-Oxley Act of 2002.

   32.2#    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
            Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>
--------------------
* Indicates a management  contract or compensatory  plan or arrangement.
# Filed herewith.

ITEM 14.   PRINCIPAL ACCOUNTANTS' FEES AND SERVICES

         The  aggregate  fees billed and  expected to be billed by GHP  Horwath,
P.C., our  independent  registered  public  accounting  firm,  for  professional
services for the fiscal years ended June 30, 2008 and 2007 are as follows:


            SERVICES RENDERED                             2008          2007
-----------------------------------------------      -----------   -----------
Audit Fees                                           $    75,000   $    90,000
Audit Related Fees                                             0             0
All Other Fees                                                 0             0

         The engagement of our independent registered public accounting firm was
approved by our board of directors  functioning as our audit  committee prior to
the start of the audit of our consolidated  financial  statements for the fiscal
year ended June 30, 2008.

                                      -38-

<PAGE>
                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                         VYTA CORP

      Date:  October 13, 2008            By: /s/ Paul H. Metzinger
                                             -----------------------------------
                                             Paul H. Metzinger, Chief Executive
                                             Officer, President and acting
                                             Chief Financial Officer


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

      Date:  October 13, 2008            By: /s/ Paul H. Metzinger
                                             -----------------------------------
                                             Paul H. Metzinger, Director, Chief
                                             Executive Officer, President and
                                             acting Chief Financial Officer
                                             (Principal Executive Officer,
                                             Principal Financial Officer and
                                             Principal Accounting Officer)


      Date:  October 13, 2008            By: /s/ Herbert J. Neuhaus
                                             -----------------------------------
                                             Herbert J. Neuhaus, Director


      Date:  October 13, 2008            By: /s/ Robert Shaw
                                             -----------------------------------
                                             Robert Shaw, Director


      Date:  October 13, 2008            By: /s/ John Hoback
                                             -----------------------------------
                                             John Hoback, Director



SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

         Neither an annual report  covering our fiscal year ended June 30, 2008,
nor any proxy material, has been sent to our security holders.



                                      -39-

<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                      PAGE
                                                                     ------
Report of Independent Registered Public Accounting Firm               F-1

Consolidated Financial Statements:

  Consolidated Balance Sheet - June 30, 2008                          F-2

  Consolidated Statements of Operations -
      Years ended June 30, 2008 and 2007                              F-3

  Consolidated Statements of Comprehensive Loss -
      Years ended June 30, 2008 and 2007                              F-4

  Consolidated Statements of Changes in Shareholders'
   Equity Deficiency -
      Years ended June 30, 2008 and 2007                              F-5

  Consolidated Statements of Cash Flows -
      Years ended June 30, 2008 and 2007                              F-7

  Notes to Consolidated Financial Statements                          F-9



















                                      -40-
<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors
Vyta Corp
Denver, Colorado

         We have audited the  accompanying  consolidated  balance  sheet of Vyta
Corp and  subsidiaries  (the  "Company")  as of June 30,  2008,  and the related
consolidated   statements  of  operations,   comprehensive   loss,   changes  in
shareholders'  equity  deficiency  and cash  flows  for each of the years in the
two-year  period  ended  June  30,  2008.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material  respects,  the financial  position of Vyta Corp
and  subsidiaries  as of June 30, 2008, and the results of their  operations and
their cash  flows for each of the years in the  two-year  period  ended June 30,
2008, in conformity with accounting  principles generally accepted in the United
States of America.

         The accompanying  consolidated  financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
2 to the  consolidated  financial  statements,  the Company  reported a net loss
applicable to common shareholders of approximately $1,971,000, substantially all
derived  from its  equity  in  development  stage net  losses  of its  principal
investee,  a  50%-owned  joint  venture,  whose  ability to  continue as a going
concern  also is in  substantial  doubt,  and  significant  cash  outflows  from
operations  for the year ended  June 30,  2008,  and a deficit of  approximately
$32,428,000 as of June 30, 2008. These factors raise substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans in regard
to these matters, which do not include any direct  revenue-producing  activities
in the  foreseeable  future,  are also  described  in Note 2.  The  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/  GHP HORWATH, P.C.
-------------------------
Denver, Colorado
October 14, 2008





                                       F-1

<PAGE>


                           VYTA CORP AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                  June 30, 2008

<TABLE>
<CAPTION>
                                                  ASSETS

Current assets:
<S>                                                                                                          <C>
  Cash and cash equivalents                                                                                  $      54,550
  Prepaid expenses and other                                                                                         1,096
                                                                                                             -------------
    Total current assets                                                                                            55,646
                                                                                                             -------------

Property and equipment:
  Office equipment and furniture                                                                                    67,107
  Less accumulated depreciation                                                                                    (66,282)
                                                                                                              ------------
                                                                                                                       825
                                                                                                              ------------

Other assets:
  Deposit                                                                                                           19,272
                                                                                                              ------------


       Total assets                                                                                           $     75,743
                                                                                                              ============


                             LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY

Current liabilities:
  Accounts payable                                                                                            $    135,305
  Advances payable, related party (Note 5)                                                                          39,500
  Accrued expenses                                                                                                  31,385
  Obligation to unconsolidated investee (Note 4)                                                                   173,153
                                                                                                              ------------
    Total liabilities  (all current)                                                                               379,343
                                                                                                              ------------

Commitments and contingencies (Note 7)

Shareholders' equity deficiency (Note 6):
  Preferred stock; $0.0001 par value; 5,000,000 shares authorized; Series A, 8%;
     deemed par value $1.00 per share; 500,000 shares
     issued and outstanding; liquidation preference of $553,260                                                    553,260
  Common stock; $0.0001 par value; 200,000,000 shares authorized;
     37,518,178 shares issued and outstanding                                                                        3,752
  Additional paid-in capital                                                                                    31,567,860
  Deficit                                                                                                      (32,428,472)
                                                                                                             -------------
      Total shareholders' equity deficiency                                                                    (   303,600)
                                                                                                             -------------

        Total liabilities and shareholders' equity deficiency                                                $      75,743
                                                                                                             =============
</TABLE>




See notes to consolidated financial statements.



                                       F-2


<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                      Consolidated Statements of Operations
                       Years Ended June 30, 2008 and 2007

<TABLE>
<CAPTION>

                                                                    2008                 2007
                                                                 ---------            ---------
<S>                                                            <C>                   <C>
General and administrative expense                             $(  663,270)          (1,835,973)
                                                                 ---------            ---------

Loss from operations                                            (  663,270)          (1,835,973)
                                                                 ---------            ---------

Other income (expense):
  Interest income                                                       19                   22
  Gain on sale of investment in
    unconsolidated investee (Note 4)                               164,234                    -
  Equity losses of unconsolidated
   investees (Note 4)                                           (1,431,774)          (1,426,590)
  Provision for loss on note
   receivable, unconsolidated investee
   (Note 3)                                                              -           (1,198,000)
                                                                 ---------            ---------
                                                                (1,267,521)          (2,624,568)
                                                                 ---------            ---------

Net loss                                                        (1,930,791)          (4,460,541)
                                                                 ---------            ---------

Accumulated dividends on preferred
  stock (Note 6)                                                (   40,110)          (   13,150)
                                                                 ---------           ----------

Net loss applicable to common
  shareholders                                                 $(1,970,901)          (4,473,691)
                                                                 =========            =========


Net loss per common share, basic
  (Note 1)                                                     $(     0.06)          (     0.19)
                                                                 =========            =========

Weighted average number of common
  shares outstanding (Note 1)                                   34,526,402           23,884,955
                                                                ==========           ==========
</TABLE>









See notes to consolidated financial statements.




                                       F-3



<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                  Consolidated Statements of Comprehensive Loss
                       Years Ended June 30, 2008 and 2007
<TABLE>
<CAPTION>

                                                              2008                  2007
                                                         ------------          ------------

<S>                                                      <C>                   <C>
Net loss                                                 $(1,930,791)          ( 4,460,541)

Change in unrealized gain on
  securities                                                       -           (       619)

Change in foreign currency
  translation adjustments, net of
  reclassification adjustment for
  gain included in net loss
  (Note 4)                                                 (  10,340)          (     8,197)
                                                         ------------          ------------


Comprehensive loss                                       $(1,941,131)          ( 4,469,357)
                                                         ============          ============
</TABLE>























See notes to consolidated financial statements.

                                       F-4

<PAGE>

                           VYTA CORP AND SUBSIDIARIES
      Consolidated Statement of Changes in Shareholders' Equity Deficiency
                       Years Ended June 30, 2008 and 2007

<TABLE>
<CAPTION>

                                                                                                                           TOTAL
                                                                              ADDITIONAL  ACCUMULATED OTHER            SHAREHOLDERS'
                              PREFERRED STOCK          COMMON STOCK            PAID IN    COMPREHENSIVE                  EQUITY
                            SHARES     DOLLARS      SHARES      DOLLARS        CAPITAL       INCOME         DEFICIT    DEFICIENCY
                            -------   --------     ----------   ---------   -----------   -----------    ------------ -------------
<S>                         <C>       <C>          <C>          <C>         <C>           <C>            <C>            <C>

Balances, July 1, 2006             -   $       -   22,643,512   $   2,264   $28,390,883   $  130,359     $(26,037,140)  $ 2,486,366

Series A preferred stock
 issued in exchange for
 advance payable related
 party and cash              500,000     500,000            -           -             -            -                -       500,000

Warrant issued for cash            -           -            -           -       251,900            -                -       251,900

Common stock issued for
  cash                             -           -    8,373,000         838     1,255,112            -                -     1,255,950

Common stock issued in
  settlement of note
  payable, stockholder             -           -      333,333          33        49,967            -                -        50,000

Options issued for
  compensation                     -           -            -           -       743,750            -                -       743,750

Net loss                           -           -            -           -             -            -      ( 4,460,541)   (4,460,541)

Accumulated dividends on
  Series A preferred
  stock                            -      13,150            -           -     (  13,150)           -                -             -

Other comprehensive
  loss:

Unrealized gain on
  securities                      -            -            -           -             -    (     619)               -    (      619)

Foreign currency
  translation
  adjustments                      -           -            -           -             -    (   8,197)               -    (    8,197)
                            --------   ---------  -----------     -------    ----------    ----------    ------------    -----------
Balances,
  June 30, 2007              500,000   $ 513,150   31,349,845   $   3,135   $30,678,462   $  121,543     $(30,497,681)  $   818,609
                            ========   =========  ===========     =======    ==========    ==========    ============    ===========
</TABLE>




                                   (Continued)
                                       F-5

<PAGE>



                           VYTA CORP AND SUBSIDIARIES
      Consolidated Statement of Changes in Shareholders' Equity Deficiency
                       Years Ended June 30, 2008 and 2007
                                   (Continued)

<TABLE>
<CAPTION>

                                                                                                                          TOTAL
                                                                             ADDITIONAL  ACCUMULATED OTHER            SHAREHOLDERS'
                              PREFERRED STOCK          COMMON STOCK           PAID IN     COMPREHENSIVE                   EQUITY
                            SHARES     DOLLARS      SHARES      DOLLARS       CAPITAL       INCOME         DEFICIT     DEFICIENCY
                            -------   --------     ----------   -------     -----------   -----------    ------------ -------------
<S>                         <C>       <C>          <C>          <C>         <C>           <C>            <C>            <C>
Balances, July 1, 2007      500,000   $513,150     31,349,845   $ 3,135     $30,678,462   $   121,543    $(30,497,681)  $   818,609

Common stock issued for
  cash                            -          -      6,168,333       617         929,508             -               -       930,125

Net loss                          -          -              -         -               -             -     ( 1,930,791)   (1,930,791)

Accumulated dividends on
  Series A preferred
  stock                           -     40,110              -         -      (   40,110)            -               -             -

Other comprehensive
  loss:

Foreign currency
  translation
  adjustment (Note 4)            -           -              -         -               -    (  121,543)              -    (  121,543)
                          --------    --------    -----------    ------      ----------    ----------    ------------   -----------
Balances,
  June 30, 2008            500,000    $553,260     37,518,178   $ 3,752     $31,567,860   $         -    $(32,428,472)  $(  303,600)
                          ========    ========    ===========    ======      ==========    ==========    ============   ===========
</TABLE>























See notes to consolidated financial statements.






                                       F-6

<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                       Years Ended June 30, 2008 and 2007

<TABLE>
<CAPTION>


                                                                                                  2008                  2007
                                                                                               -----------          -----------
<S>                                                                                          <C>                    <C>
Cash flows from operating activities:
 Net loss                                                                                    $ (1,930,791)          ( 4,460,541)
                                                                                               -----------          -----------
 Adjustments to reconcile net loss to net cash used
  in operating activities:
  Noncash consulting expense                                                                            -               436,197
  Depreciation expense                                                                              4,612                 5,387
  Provision for loss on note receivable,
    unconsolidated equity investee                                                                      -             1,198,000
  Equity in net losses of unconsolidated investees                                              1,431,774             1,426,590
  Gain on sale of investment in unconsolidated investee                                       (   164,234)                    -
  Options issued for compensation                                                                       -               743,750
  Changes in operating assets and liabilities:
   Decrease in prepaid expenses and other                                                             744                14,742
   Increase in accounts payable and accrued expenses                                               59,296                23,151
                                                                                               ----------            ----------
 Total adjustments                                                                              1,332,192             3,847,817
                                                                                               ----------            ----------

    Net cash used in operating activities                                                     (   598,599)           (  612,724)
                                                                                               ----------            ----------

Cash flows from investing activities:
  Sale of investment securities                                                                        59                     -
  Increase in notes and advances receivable,
   unconsolidated investee                                                                    (   921,237)          ( 1,182,784)
  Sale of investment in unconsolidated investee                                                   250,000                     -
                                                                                               ----------            ----------
    Net cash used in investing activities                                                     (   671,178)          ( 1,182,784)
                                                                                               ----------            ----------

Cash flows from financing activities:
  Exercise of warrants, and common stock and warrants issued
   for cash                                                                                       930,125             1,255,950
  Proceeds applied to preferred stock and
   warrant purchase                                                                                     -               651,900
  Proceeds from advance and note payable                                                           89,500                50,000
  Payment of advance and note payable                                                         (    50,000)                    -
                                                                                               ----------            ----------
    Net cash provided by financing activities                                                     969,625             1,957,850
                                                                                               ----------            ----------

Net (decrease) increase in cash and cash equivalents                                           (  300,152)              162,342

Cash and cash equivalents, beginning                                                              354,702               192,360
                                                                                               ----------             ---------

Cash and cash equivalents, ending                                                             $    54,550               354,702
                                                                                               ==========             =========
</TABLE>


                                        (Continued)








See notes to consolidated financial statements.

                                       F-7

<PAGE>

                           VYTA CORP AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                       Years Ended June 30, 2007 and 2006
                                    Continued

<TABLE>
<CAPTION>
                                                                                                 2008                  2007
                                                                                               ----------            ---------
<S>                                                                                           <C>                      <C>
Supplemental disclosure of non-cash investing and financing activities:
   Advances, related party converted to preferred stock                                                -             $ 100,000
                                                                                                                     =========
   Issuance of common stock for payment of note payable                                                -                50,000
                                                                                                                     =========
</TABLE>












































See notes to consolidated financial statements.

                                       F-8


<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

1.  BASIS OF  PRESENTATION,  BUSINESS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING
POLICIES:

BASIS OF PRESENTATION:

The accompanying  consolidated financial statements include the accounts of Vyta
Corp, a Nevada corporation, its wholly-owned subsidiaries, NanoPierce Connection
Systems,  Inc., a Nevada  corporation  (NCOS),  and ExypnoTech,  LLC (ET LLC), a
Colorado limited liability company (collectively  referred to as the "Company").
The Company has two investments  which are accounted for using the equity method
of accounting. These equity method investments consist of BioAgra, LLC (BioAgra)
and through December 27, 2007, ExypnoTech,  GmbH (EPT) (Note 4). All significant
intercompany accounts and transactions have been eliminated in consolidation.

BUSINESS:

NCOS and ET LLC had no revenues or  business  activities  of its own in 2008 and
2007. The Company has two unconsolidated investees which are accounted for using
the equity  method of  accounting,  ExypnoTech,  GmbH (EPT),  and  BioAgra,  LLC
(BioAgra),  which operate in two segments, the RFID industry and the animal feed
industry,  respectively.  EPT's  activities  primarily  consist of manufacturing
inlay  components  used in, among other things,  Smart Labels,  which is a paper
sheet holding a chip-containing  module that is capable of memory storage and/or
processing.  BioAgra (a development stage enterprise)  manufactures and plans to
sell a beta glucan product, Agrastim(R), to be used as a replacement for hormone
growth steroids and antibiotics in products such as poultry feed.

On  December  27,  2007,  the  Company  sold its 49% equity  interest  in EPT to
TagStar,  GmbH  (TagStar),  the 51% equity  interest  owner of EPT,  for cash of
$250,000 (Note 4).

On September 15, 2008, the Company filed collection and foreclosure  proceedings
against  BioAgra in connection with the secured  promissory  notes it holds from
BioAgra (Notes 3 and 4).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS:

The  preparation  of the  financial  statements in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the 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 revenues and
expenses  during the reporting  periods.  Actual results could differ from those
estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The fair values of the Company's cash and cash  equivalents and accounts payable
approximate  their  carrying  amounts  due  to the  short  maturities  of  these
instruments.  The fair  values  of the notes and  advances  receivable  from the
unconsolidated  equity investee,  the advances receivable from an officer of the
Company and  advances  payable,  related  party,  are not subject to  reasonable
estimation, based upon the related party nature of the underlying transactions.

                                      F-9
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007


CASH AND CASH EQUIVALENTS:

The Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash equivalents.

DEFERRED CONSULTING COSTS:

In June 2006, the Company entered into a one-year  consulting services agreement
with two unrelated parties,  in which the parties agreed to provide lobbying and
public  relations  services.  Compensation  consisted  of 200,000  shares of the
Company's common stock with a market value of approximately $182,000 (based on a
closing market price of $0.91 per share at the date the  transaction was entered
into) and a warrant to purchase  500,000  shares of the Company's  common stock,
with an exercise price of $0.91 per share and a term of 3 years. The warrant was
valued at $283,000 using the Black-Scholes  pricing model. The deferred cost was
amortized on a  straight-line  basis as earned over the one-year period from the
date of the  agreement.  During the year ended June 30,  2007,  the value of the
shares and  warrant  was  amortized  in full,  and the  Company  recognized  the
remaining expense of $436,197.

AVAILABLE FOR SALE SECURITIES:

Available  for sale  securities  consist  of 1,180  shares  of  common  stock of
Intercell International  Corporation (Intercell).  These securities were carried
at no value,  which was their  estimated  fair value  based upon the  absence of
quoted market prices or any other  objective  basis for  estimation.  During the
year ended June 30, 2008,  the Company sold all of the 1,180 shares of available
for sale securities for cash of $59.

NOTES AND ADVANCES RECEIVABLE

Notes and advances  receivable  consist of promissory notes and advances made to
the Company's  unconsolidated  investee,  BioAgra. Notes and advances receivable
are recorded net of an allowance for uncollectible  receivables.  Allowances for
estimated losses from uncollectible  loans are recorded when it is probable that
the  counterparty  (BioAgra)  will be unable to pay all amounts due according to
the terms of the promissory notes and advances receivable.

The Company stops  accruing  interest on a loan when the  borrower's  ability to
meet contractual payments is in doubt. For notes which are on nonaccrual status,
it is the Company's  policy to reverse interest  previously  accrued on the loan
against interest income. Interest on such loans is thereafter recorded on a cash
basis and is included in earnings only when  actually  received in cash and when
full payment of principal is no longer doubtful.

A receivable  is  considered  impaired when it is probable that all amounts will
not be  collected  as they  become  due  according  to the  terms  of the  loan.
Generally, impaired loans are accounted for on a nonaccrual basis. The extent of
impairment is measured based upon a comparison of the recorded investment in the
loan with either the expected cash flows  discounted  using the loan's  original
effective  interest rate or the fair value of the  underlying  collateral if the
loan is collateral dependent.

EQUITY METHOD INVESTMENTS:

Investee entities in which the Company can exercise significant  influence,  but
not control,  are accounted for under the equity method of  accounting.  Whether
the Company exercises  significant influence with respect to an investee depends
on an evaluation of several factors including,  among others,  representation on

                                      F-10
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

the  company's  board of directors  and  ownership  level,  generally 20% to 50%
interest  in the  voting  securities  of the  company  including  voting  rights
associated  with  the  Company's   holdings  in  common,   preferred  and  other
convertible  instruments in the company.  Under the equity method of accounting,
the Company's  share of the earnings or losses of these companies is included in
the equity income (loss) section of the consolidated statements of operations.

A loss in value of an  investment  that is other  than a  temporary  decline  is
recognized as a charge to operations. Evidence of a loss in value might include,
but would not  necessarily  be limited to,  absence of an ability to recover the
carrying  amount of the  investment  or  inability of the investee to sustain an
earnings capacity that would justify the carrying amount of the investment.

PROPERTY AND EQUIPMENT:

Property and equipment are stated at cost.  Depreciation  expense is provided by
use of accelerated and straight-line  methods over the estimated useful lives of
the assets, which range from five to seven years.

INCOME TAXES

On July 1, 2007,  the  Company  adopted  Financial  Accounting  Standards  Board
("FASB")  Interpretation  No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, AN
INTERPRETATION   OF  FASB  STATEMENT  109  ("FIN  48").  Based  on  management's
evaluation,  the Company did not have any unrecognized  tax benefits,  and there
was no effect on the  Company's  opening  deficit,  current  operations  or cash
flows,  or its  net  operating  loss  carryforwards  and  related  deferred  tax
valuation allowance as a result of implementing FIN 48. The Company is no longer
subject to tax  examinations  for years before 2006.  The Company will recognize
any tax-related interest and penalties as a component of income tax expense.

LEGAL DEFENSE COSTS:

The Company  does not accrue for  estimated  future  legal and  related  defense
costs,  if any, to be incurred in  connection  with  outstanding  or  threatened
litigation  and other  disputed  matters  (Note 7), but rather  records  such as
period costs when the services are rendered.

STOCK-BASED COMPENSATION:

Beginning July 1, 2006,  the Company  adopted the provisions of and accounts for
stock-based  compensation in accordance  with Statement of Financial  Accounting
Standards  ("SFAS") No. 123 - revised 2004 ("SFAS 123R"),  SHARE-BASED  PAYMENT.
Under the fair  value  recognition  provisions  of this  statement,  stock-based
compensation  cost is  measured at the grant date based on the fair value of the
award and is recognized as expense on a  straight-line  basis over the requisite
service  period,   which  is  the  vesting  period.   The  Company  elected  the
modified-prospective  method,  under  which prior  periods  were not revised for
comparative purposes.  The valuation provisions of SFAS 123R apply to new grants
and  to  grants  that  were  outstanding  as  of  the  effective  date  and  are
subsequently  modified.  All options  granted prior to the adoption of SFAS 123R
and outstanding during the periods presented were fully-vested.  The Company did
not grant any options during the year ended June 30, 2008.  The Company  granted
2,350,000  options  during the year ended June 30, 2007 (Note 6). As a result of
the  adoption  of SFAS No.  123R,  the net loss for the year ended June 30, 2007
increased by $743,750 ($0.03 per share).

                                      F-11
<PAGE>

                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

The Company used the following  assumptions to determine the fair value of stock
option  grants  during  the year  ended  June 30,  2007,  (and did not grant any
options during the year ended June 30, 2008):

                      Expected term                                 5 years
                      Volatility                                  172% - 183%
                      Risk-free interest rate                    4.82% - 4.94%
                      Dividend yield                                   0

The expected term of stock options  represents the period of time that the stock
options  granted are expected to be  outstanding  based on  historical  exercise
trends.  The expected  volatility is based on the historical price volatility of
the Company's  common stock.  The risk-free  interest rate  represents  the U.S.
Treasury  bill rate for the  expected  term of the related  stock  options.  The
dividend yield  represents our anticipated  cash dividend over the expected term
of the stock options.

FOREIGN CURRENCY TRANSLATION:

The financial  statements of the Company's  foreign equity investment (EPT) were
measured using the local currency (the Euro) as the functional currency.  Assets
and liabilities of EPT were translated at exchange rates as of the balance sheet
date.  Revenues and expenses  were  translated  at average  rates of exchange in
effect during the period. The resulting cumulative translation  adjustments have
been  recorded as a component  of  comprehensive  income  (loss),  included as a
separate item in shareholders' equity.

LOSS PER SHARE:

Basic loss per share of common stock is computed  based on the average number of
common shares  outstanding  during the year.  Stock options and warrants are not
considered  in the  calculation,  as the impact of the  potential  common shares
(14,754,844  shares at June 30,  2008 and  14,859,844  shares at June 30,  2007)
would be to decrease loss per share (anti-dilutive). Therefore, diluted loss per
share is not presented.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  BUSINESS
COMBINATIONS,  ("SFAS No.  141R").  SFAS No. 141R will change the accounting for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the acquisition-date fair value with limited exceptions. SFAS No. 141R will also
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  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.
Accordingly,  any business  combinations the Company engages in will be recorded
and  disclosed  following  existing  GAAP  until  July 1,  2009.  The  Company's
management  expects SFAS No. 141R will have an impact on accounting for business
combinations once adopted, but the effect is dependent upon acquisitions at that
time.

In December  2007,  the FASB issued SFAS No. 160,  NONCONTROLLING  INTERESTS  IN
CONSOLIDATED FINANCIAL  STATEMENTS--AN AMENDMENT OF ARB NO. 51, OR SFAS NO. 160.
SFAS  No.  160  establishes  new  accounting  and  reporting  standards  for the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary.  SFAS No. 160 is effective  for fiscal  years  beginning on or after

                                      F-12
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

December 15, 2008.  Management  believes  that SFAS 160 will not have a material
impact on the  Company's  financial  position or results of  operations.

In May 2008, the FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY  ACCEPTED
ACCOUNTING PRINCIPLES" (SFAS 162). SFAS 162 identifies the sources of accounting
principles  and  the  framework  for  selecting  the  principles   used  in  the
preparation  of  financial  statements  of  nongovernmental  entities  that  are
presented in conformity with generally accepted accounting  principles (the GAAP
hierarchy).  SFAS 162 will become effective 60 days following the SEC's approval
of the Public Company  Accounting  Oversight Board amendments to AU Section 411,
"The Meaning of Present Fairly in Conformity With Generally Accepted  Accounting
Principles."  The  Company  does not expect the  adoption  of SFAS 162 to have a
material effect on its results of operations and financial condition.

In May 2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1  "ACCOUNTING
FOR  CONVERTIBLE  DEBT  INSTRUMENTS  THAT MAY BE SETTLED IN CASH UPON CONVERSION
(INCLUDING  PARTIAL CASH  SETTLEMENT)" (FSP APB 14-1). FSP APB 14-1 requires the
issuer of certain  convertible  debt instruments that may be settled in cash (or
other assets) on conversion to separately  account for the liability  (debt) and
equity  (conversion  option)  components  of the  instrument  in a  manner  that
reflects the  issuer's  non-convertible  debt  borrowing  rate.  FSP APB 14-1 is
effective for fiscal years  beginning  after  December 15, 2008 on a retroactive
basis and will be adopted by the  Company  in the first  quarter of fiscal  year
2009.  The  Company  does  not  expect  the  adoption  of FSP APB 14-1 to have a
material effect on its results of operations and financial condition.

2.  GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLANS:

The Company's  financial  statements  for the year ended June 30, 2008 have been
prepared on a going concern basis,  which contemplates the realization of assets
and the  settlement  of  liabilities  and  commitments  in the normal  course of
business.  The Company reported a net loss of $1,930,971 (net loss applicable to
common  shareholders  of  $1,970,901)  for the year ended June 30, 2008,  and an
accumulated deficit of $32,428,472 as of June 30, 2008. The Company had negative
working capital of $323,697 at year end and the Company had no revenues from its
activities during the year ended June 30, 2008.

The  Company's  ability to continue as a going  concern may be  dependent on the
success of management's  plan discussed below.  The financial  statements do not
include any adjustments  relating to the  recoverability  and  classification of
assets or the amounts and  classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.

During the 2009  fiscal  year,  the Company  intends to continue  its efforts in
connection with the Agristim product (Note 4) with the continuing development of
its sales,  nationally and internationally in other animal feed markets, such as
the equine and the swine markets.  Management intends to continue to raise funds
to support the efforts through the sale of its equity securities.

To the extent the Company's  operations are not sufficient to fund the Company's
capital  requirements,  the Company  may attempt to enter into a revolving  loan
agreement with financial  institutions  or attempt to raise capital  through the
sale of additional capital stock or through the issuance of debt. At the present
time,  the Company does not have a revolving  loan  agreement with any financial
institution  nor can the Company  provide any assurance  that it will be able to
enter into any such  agreement in the future,  particularly  in light of current
economic  conditions,  or be able to raise funds through the further issuance of
debt or equity in the Company.

In  addition,  the  United  States is  experiencing  severe  instability  in the
commercial  and investment  banking  systems which is likely to continue to have
far-reaching   effects  on  the   economic   activity  in  the  country  for  an
indeterminable period. The long-term impact on the United States economy and the
Company's operating  activities and ability to raise capital cannot be predicted
at this time, but may be substantial.

                                      F-13
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007


3.   NOTES AND ADVANCES RECEIVABLE - UNCONSOLIDATED INVESTEE:

During the year ended June 30, 2006,  the Company  loaned  $1,686,570 to BioAgra
through a series of  secured,  7.5%  promissory  notes,  which were due over the
period from June 30 through  October 31,  2006.  On June 26,  2006,  the Company
agreed to combine all of the  promissory  notes and accrued  interest of $40,257
into a $1,726,827 secured, 7.5% promissory note with payments to be made monthly
starting  October 31, 2006,  through  October 31, 2007. The funds were loaned to
facilitate  BioAgra's  completion  of its first  production  line and to support
operations.  The  promissory  note  is  collateralized  by all  BioAgra  assets.
Additionally,  the  promissory  note  is  to  be  paid  in  full  prior  to  any
distributions  being made to the members of the joint  venture.  During the year
ended June 30, 2007,  the note was reduced by $1,371,269,  which  represents the
excess of the BioAgra  losses  recognized by the Company over the adjusted basis
of the Company's equity investment in BioAgra.

During  the year  ended  June 30,  2007,  the  Company  advanced  an  additional
$1,182,784 to BioAgra.  In October  2007,  the Company  executed a second,  7.5%
promissory  note for  $1,182,784  with  BioAgra  with the same terms as the note
above, but the note did not provide for scheduled payments.

During the year ended June 30, 2007,  the Company made a decision to provide for
a loss on the value of the note  receivable.  This decision was based on factors
including  the  Company's  evaluation  of past and  current  operating  results,
failure of BioAgra  to make  scheduled  payments  and the  Company's  continuing
support of the  development  stage  activities  of  BioAgra.  The  Company  also
considered  the  estimated  fair value of BioAgra's  assets and  liabilities  in
making  the  decision.  As a result of this  decision,  the  Company  recorded a
provision for loss of $1,198,000 in the quarter ended June 30, 2007.

During the year ended June 30, 2008, the Company advanced an additional $921,237
to BioAgra at 7.5% interest.  On March 31, 2008,  the Company  executed a third,
7.5%  promissory  note for $486,939 with BioAgra with the same terms as the note
above,  but did not provide for scheduled  payments.  On July 14, 2008,  BioAgra
executed a fourth 7.5% promissory note for $195,164,  with BioAgra with the same
terms as above, but the note did not provide for scheduled payments.

The Company is not  accruing  interest on these  notes  receivable,  as they are
currently in default and non-performing.

The  notes  and  advances  receivable  were  reduced  to $0 at June 30,  2008 by
applying  the  losses of BioAgra  (Note 4).  The losses of BioAgra  for the year
ended  June 30,  2008  were in  excess  of the  carrying  value of the  notes by
$173,153.  This amount has been recorded as a current  liability by the Company,
as the Company was committed to provide further  financial support to BioAgra as
of June 30, 2008.

4.  INVESTMENTS IN UNCONSOLIDATED INVESTEES:

INVESTMENT IN EPT:

On December 27,  2007,  the Company  executed a Share  Purchase  Agreement  with
TagStar,  GmbH, the holder of the 51% equity interest in EPT,  pursuant to which
the Company sold its 49% equity  interest to TagStar for cash of  $250,000.  The
Company  recorded a gain of $164,234 in  connection  with the sale of its equity
interest in EPT.

At  December  27,  2007,  the  Company's  investment  in EPT was  $217,649.  The
Company's  proportionate  share of its net income was  approximately  $3,000 and
$43,800 for the years ended June 30, 2008 and 2007, respectively. The cumulative
translation  adjustment  was  $121,543 and $131,883 at July 1, 2007 and December

                                      F-14
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

27, 2007,  respectively.  On December  27,  2007, a $131,883  reduction to other
comprehensive  income was recorded by the Company and  recognized as a component
of the gain on the sale of EPT. Summarized financial  information of EPT for the
period from July 1, 2007 through  December 27, 2007, and the year ended June 30,
2007 is as follows:


                               PERIOD FROM
                              JULY 1, 2007
                                 THROUGH                YEAR ENDED
                            DECEMBER 27, 2007         JUNE 30, 2007
                            --------------------     -------------------
Revenues(1)                 $         2,158,689     $        3,714,845
Expenses(2)                         ( 2,152,831)          (  3,625,463)
                            --------------------     -------------------

Net income                 $              5,858     $           89,382
                           =====================     ===================


         (1)      Revenues include $2,155,669 and $1,842,199 for the period from
                  July 1, 2007 through December 27, 2007 and the year ended June
                  30, 2007, respectively, of sales to the 51% owner of EPT.
         (2)      Expenses  include  $211,508  and  $229,754 for the period from
                  July 1, 2007 through December 27, 2007 and the year ended June
                  30,  2007,  respectively,  of charges paid to the 51% owner of
                  EPT.

INVESTMENT IN BIOAGRA

The  Company  has a 50% equity  interest in the joint  venture,  BioAgra,  which
manufactures   and  sells  a  beta  glucan  product,   YBG-2000  also  known  as
AgraStim(TM), which can be used as a replacement for hormone growth steroids and
antibiotics  in animal feed  products such as poultry feed. As of June 30, 2008,
BioAgra (a development stage company) has completed construction of a production
line;  however  BioAgra has not yet  recognized  any  significant  revenues from
product  sales.  At each  reporting  period,  management  makes an assessment to
determine if the  investment in BioAgra  represents a variable  interest  entity
subject to consolidation.  Through June 30, 2008, management has determined that
BioAgra was not subject to consolidation.

On September 15, 2008, the Company filed collection and foreclosure  proceedings
against BioAgra in the City and County Court of Denver, Colorado. The collection
and  foreclosure  proceedings  are  directly  related to  principal  and accrued
interest of approximately $4 million in loans advanced to BioAgra, including the
$3,963,982  loaned  through  a  series  of  secured  promissory  notes,  and  an
additional $37,788 for advances not represented by a promissory note.

Upon the successful conclusion of the litigation,  the Company intends to become
the sole holder of the assets of BioAgra and plans to continue the operations of
BioAgra, and the manufacturing and marketing of the AgraStrim product.

The terms of the joint venture  provide for the Company to share in 50% of joint
venture net income,  if any, or net losses.  The Company is  accounting  for its
investment in BioAgra as an equity  method  investment.  Net losses  incurred by
BioAgra have exceeded the underlying  equity attributed to BioAgra's other joint
venture  investor.  As a result,  the excess of the losses  attributable  to the
other joint venture  investor have been charged to the Company.  Since September
30,  2006 and  through  June  30,  2008,  the  carrying  value of the  Company's
investment in BioAgra was $0.  BioAgra  losses for the years ended June 30, 2008

                                      F-15
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

and 2007 were $1,434,742 and $1,478,585,  respectively. Losses of $1,261,589 and
$1,371,269,  respectively,  were  applied  to  reduce  the  value  of the  notes
receivable from BioAgra.

Summarized  financial  information  of BioAgra  as of June 30,  2008 and for the
years ended June 30, 2008 and 2007, is as follows:

Assets:
   Current assets                                         $            113,069
   Land, building and equipment, net(2)                              1,229,019
                                                          --------------------
Total assets                                              $          1,342,088
                                                          ====================

Liabilities and members' deficiency:
   Current liabilities(1)                                 $          4,424,757
   Obligation under capital lease(2)                                   909,796
                                                          --------------------
Total liabilities                                                    5,334,553

Members' deficiency                                       (          3,992,465)
                                                          --------------------
Total liabilities and members'
   deficiency                                             $          1,342,088
                                                          ====================

         (1)      Includes  $3,830,850  owed to the  Company.  The  Company  has
                  classified  this  amount as notes  receivable  in  non-current
                  assets on the balance  sheet and is not  accruing  interest on
                  these notes  receivable,  as they are currently in default and
                  non-performing.  The  notes  and  advances  receivable  on the
                  Company's balance sheet were reduced to $0 at June 30, 2008 by
                  applying the losses of BioAgra.

         (2)      BioAgra  leases  land and a building  under a  ten-year  lease
                  expiring  in February  2015,  which  requires a monthly  lease
                  payment of $12,000.

                               YEAR ENDED                YEAR ENDED
                             JUNE 30, 2008              JUNE 30, 2007
                            -----------------       -------------------
Revenues                    $         114,545       $           68,754

Expenses                           (1,549,287)              (1,547,339)
                            -----------------       -------------------

Net loss                    $      (1,434,742)      $       (1,478,585)
                            =================       ====================


5.  ADVANCES PAYABLE, RELATED PARTY

At June  30,  2008,  the  Company  owes its  majority  shareholder  $39,500  for
advances.  This amount is unsecured,  non-interest bearing and is due on demand.
In September  2008,  the Company  made a payment of $5,000  against the advances
payable.

                                      F-16
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007


6. SHAREHOLDERS' EQUITY DEFICIENCY:

PREFERRED STOCK:

In February  2007,  the Company sold 500,000  shares of Series A  nonconvertible
preferred stock for $500,000 cash to Arizcan  Properties,  Ltd.  (Arizcan),  the
majority  shareholder  of the  Company.  Arizcan had  advanced  the funds to the
Company,  prior to the  issuance of the  shares.  The shares  provide  that when
voting as a single class, the shares have the votes and the voting power that at
all times is greater by 1% than the combined votes and voting power of all other
classes  of  securities  entitled  to vote on any  matter.  As a  result  of the
issuance, Arizcan acquired approximately 51% of the voting power of the Company.
The  Company  has a right,  solely at the  Company's  discretion,  to redeem the
shares in 2017 at 130% of deemed par value.

The holder of the Series A is  entitled  to a dividend  equal to 8% per annum of
the deemed par value  ($1.00 per share).  Accumulated  dividends  for the period
from Series A issuance  (February  2007)  through  June 30,  2008,  were $53,260
($40,110   and  $13,150   during  the  years  ended  June  30,  2008  and  2007,
respectively)  which have been  recorded  as an  increase to net loss per common
shareholder.  Also,  the holder is entitled to a  liquidation  preference of the
deemed par value for each outstanding share and any accrued but unpaid dividends
upon the liquidation of the Company.

COMMON STOCK:

2008 FISCAL YEAR

Between  July 1, 2007 and June 30,  2008,  the Company  issued an  aggregate  of
6,168,333  shares of its  restricted  common  stock to  Arizcan  Properties  for
$930,125  cash.  The  shares  were  sold for  $0.15  per  share  (based  upon an
approximate  55%  discount  from the closing  market  price at the time of sale,
ranging from $0.39-$0.40 per share on the dates of the transactions).

2007 FISCAL YEAR

Between March and June 2007, the Company issued an aggregate of 8,373,000 shares
of its  restricted  common  stock to Arizcan  Properties  for cash  proceeds  of
$1,255,950.  The shares were sold for $0.15 per share (based upon an approximate
38% discount from the closing market price,  ranging from  $0.37-$0.46 per share
on the dates of the transactions).

In June 2007, the Company  issued 333,333 shares of its restricted  common stock
to a non-related party shareholder as payment on a $50,000  promissory note. The
shares were issued for $0.15 per share,  based on the cash proceeds per share in
the transactions noted above.

STOCK OPTIONS:

The  Company  has two stock  option  plans  which  permit the grant of shares to
attract,  retain and motivate  employees,  directors  and  consultants  of up to
2,863,000 shares of common stock. Options are generally granted with an exercise
price equal to the Company's market price of its common stock on the date of the
grant and with vesting  rates,  as  determined  by the Board of  Directors.  All
options  outstanding  at July 1,  2007 and June 30,  2008 are  fully-vested  and
exercisable.  The aggregate intrinsic value of outstanding  fully-vested options
as of June 30, 2008 was approximately $155.

                                      F-17
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

The  Company  did not grant any  options  during the year  ended June 30,  2008.
During the year ended June 30, 2007, the Company granted 2,350,000 stock options
to an officer,  directors  and an employee at an exercise  prices  ranging  from
$0.32 to $0.41 per share.  The fair value of stock  options at the date of grant
was $743,750 and was recorded as compensation expense.

The expected term of stock options  represents the period of time that the stock
options  granted are expected to be  outstanding  based on  historical  exercise
trends.  The expected  volatility is based on the historical price volatility of
the Company's  common stock.  The risk-free  interest rate  represents  the U.S.
Treasury  bill rate for the  expected  term of the related  stock  options.  The
dividend yield  represents our anticipated  cash dividend over the expected term
of the stock options.

A summary of the stock  option  activity  for the year ended June 30, 2008 is as
follows:
<TABLE>
<CAPTION>
                                                                              Weighted     Weighted Average
                                                                              Average         Remaining
                                                   Shares Under Option     Exercise Price  Contractual Life
                                                   -------------------- ----------------- -------------------
<S>                                                     <C>                  <C>                   <C>
Outstanding at July 1, 2007                             2,748,127            $  3.00               3.89 years
  Granted                                                       -                  -                        -
  Exercised                                                     -                  -                        -
  Expired                                                (105,000)          (   6.50)                       -
                                                   -------------------- ----------------- -------------------

Outstanding at June 30, 2008                            2,643,127            $  3.00               2.86 years
                                                   ==================== ================= ===================

Exercisable at June 30, 2008                            2,643,127            $  3.00               2.86 years
                                                   ==================== ================= ===================
</TABLE>

A summary of the stock option plans at June 30, 2008 is as follows:
<TABLE>
<CAPTION>

                                         OPTIONS OUTSTANDING                                 OPTIONS EXERCISABLE
                     ------------------------------------------------------------- -----------------------------------------
                                       WEIGHTED-AVERAGE
     RANGE OF         NUMBER OF     REMAINING CONTRACTUAL      WEIGHTED-AVERAGE        NUMBER OF         WEIGHTED-AVERAGE
  EXERCISE PRICES      OPTIONS           LIFE (YEARS)           EXERCISE PRICE          OPTIONS           EXERCISE PRICE
-------------------- ------------- ------------------------- --------------------- ------------------- ---------------------
<S>                    <C>                    <C>                 <C>                  <C>                 <C>
  $ 0.32-  0.41         2,350,000              8.85                $  0.33              2,350,000           $    0.33
    4.00- 10.00            57,750              0.06                   6.25                 57,750                6.25
   10.20- 20.00           114,777              3.57                  13.65                114,777               13.36
   20.01- 40.00            43,000              2.77                  30.39                 43,000               30.39
   40.20- 60.00            77,100              1.53                  62.21                 77,100               62.21
  100.20-120.00               500              1.67                 120.00                    500              120.00
                     ------------- ------------------------- --------------------- ------------------- ---------------------
                        2,643,127              2.86                 $ 3.00              2,643,127           $    3.00
                     ============= ========================= ===================== =================== =====================
</TABLE>







                                      F-18
<PAGE>

                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007


WARRANTS:

At June  30,  2008,  the  following  warrants  to  purchase  common  stock  were
outstanding:

         NUMBER OF COMMON
    SHARES COVERED BY WARRANTS       EXERCISE PRICE          EXPIRATION DATE
------------------------------       --------------          ----------------
               22,500                    12.00                 January 2010
            1,250,000                     3.00                 January 2009
               92,500                     1.00                 January 2009
            4,246,717                     1.00                February 2009
            6,000,000                     0.50                  March  2012
              500,000                     0.91                  June   2009
         ------------
           12,111,717
         ============

FISCAL YEAR 2008:

During the year ended June 30,  2008,  the  Company  did not issue or cancel any
warrants. During the year ended June 30, 2008, no warrants were exercised.

FISCAL YEAR 2007:

In February 2007, the Company sold to Arizcan, a warrant exercisable immediately
for up to 6,000,000 shares of restricted common stock for $251,900.  The warrant
has an exercise price of $0.50 per share and provides for cashless exercise. The
warrant has a term of 5 years.

In January 2007, warrants to purchase 9,625 shares of common stock expired.

7.  COMMITMENTS AND CONTINGENCIES

LITIGATION:

FINANCING AGREEMENT SUIT:

The Company is a plaintiff and counter-claim  defendant in a suit pending in the
United  States  District  Court  for the  Southern  District  of New  York  (the
"District Court").  In this suit, the Company filed claims for securities fraud,
common-law fraud, and breach of contract against the defendants.  One defendant,
Harvest Court, LLC ("Harvest Court"),  has counterclaimed for alleged violations
of the  federal  securities  laws.  In January  2008 the Court  granted  summary
judgment against the Company on all of its claims,  which the Company intends to
appeal  when the  judgment  becomes  final.  The Court  also  dismissed  certain
counterclaims  against the Company.  The Company  intends to  vigorously  defend
itself against the remaining claims. In a disclosure  statement filed by Harvest
Court, it set forth a damage computation of approximately $4.1 million,  as well
as other categories of damages, such as out-of-pocket,  statutory, punitive, and
other for unspecified amounts.



                                      F-19
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007

Harvest  Court has also sued the  Company  in New York state  court (the  "State
Court") for breach of contract  relating to its failure to issue certain  shares
of stock  allegedly due under a pre-2007  financing  agreement.  The Company has
counterclaimed  in this case for fraud.  The State  Court  issued an  injunction
requiring the company to reserve and set aside a certain amount of stock,  which
the  Company has done.  The  Company  intends to  vigorously  defend  itself and
prosecute its counterclaims.

If  management  believes  that a loss arising from these matters is probable and
can reasonably be estimated,  the Company records the amount of the loss, or the
minimum  estimated  liability when the loss is estimated  using a range,  and no
point within the range is more probable than another. As additional  information
becomes available,  any potential liability related to these matters is assessed
and the  estimates  are revised,  if  necessary.  Based on  currently  available
information,  management does not believe that a loss from the matters described
above is  probable,  and  therefore  has not accrued for any  asserted  damages.
Management believes that the ultimate outcome of these matters, individually and
in the  aggregate,  will not have a  material  adverse  effect on the  Company's
financial  position  or  overall  trends  in  results  of  operations.  However,
litigation is subject to inherent uncertainties, and an unfavorable ruling could
result in a material  adverse  impact on the  financial  position and results of
operations of the period in which the outcome is determined.

LEASES:

The Company has entered into certain facilities and equipment leases. The leases
are  non-cancelable  operating  leases that expire  through  December  31, 2011.
Future minimum lease payments under these operating leases are as follows:

                                 YEAR ENDING
                                    JUNE 30,             AMOUNT
                                 ------------         -----------
                                     2009               $ 39,415
                                     2010                 40,618
                                     2011                 41,822
                                     2012                 10,531
                                                      -----------
                                                        $132,386
                                                      ===========

Rental  expense for all  operation  leases was $68,208 and $54,396 for the years
ended June 30, 2008 and 2007, respectively.

8. INCOME TAXES:

As of June 30,  2008,  the  Company  has net  operating  loss  carryforwards  of
approximately $15,823,000, which expire between 2013 and 2028. The Company's net
operating loss carry forwards may be subject to annual limitations,  which could
reduce or defer the utilization of the losses as a result of an ownership change
as defined in Section 382 of the Internal Revenue Code.

The tax effects of temporary  differences  that would give rise to substantially
all deferred tax assets subject to the valuation  allowance at June 30, 2008 are
as follows:

                  Deferred tax asset, non-current amount:
                  Net operating loss carryforwards                $ 5,380,000
                  Losses in unconsolidated investees                  488,000
                                                                  ------------
                                                                    5,868,000
                  Less valuation allowance                         (5,868,000)
                                                                  ------------

                  Net deferred tax assets                         $         -
                                                                  ============

                                      F-20
<PAGE>
                           VYTA CORP AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED JUNE 30, 2008 AND 2007


The Company and its  subsidiaries did not incur income tax expense for the years
ended June 30, 2008 and 2007. The  reconciliation  between income taxes computed
at the  statutory  federal  tax rate of 34% and the  effective  tax rate for the
years ended June 30, 2008 and 2007 is as follows:

                                            2008              2007
                                      -------------       -----------
Expected income tax benefit           $ (  656,000)       (1,517,000)
Increase in valuation allowance            656,000         1,517,000
                                      -------------       -----------
                                      $          -                 -
                                      =============       ===========



9. SUBSEQUENT EVENTS:

In July 2008,  Arizcan  Properties was issued  6,000,000 shares of the Company's
common stock in connection with the exercise of the warrant it held.

Between July 1, 2008 and September 30, 2008, the Company issued 1,495,000 shares
of its restricted common stock to Arizcan Properties for cash of $204,000.



















                                      F-21